June 2022 Real Estate Market Trends

Real estate trends for June 2022 includes a continuous rise in home prices with little signs of a slowdown. The College Area, San Carlos, Allied Gardens, and Del Cerro all have had significant increases in single family home prices since the beginning of this year. You have likely read that mortgage rates have greatly increased recently but historically, rates are still low, in the 5’s for well qualified buyers. Rates haven’t had much of an effect on slowing down property inflation. If rates get into the 7 or 8 percent range, a greater slowdown is expected, but it’s not clear how much further rates will increase. Back in the very late 1970’s, mortgage rates were over 10%! That clearly resulted in a slowdown in the economy.

I have a buyer who is waiting for home prices to drop 20% like they did in 2008, but I let them know that scenario is unlikely as we are in a different environment then the beginning of the Obama presidency. Our current economy is experiencing significant price inflation in everything from food, to energy prices, to services. Fundamentals of economics state that it typically takes many years to return to price stability. Also, San Diego lacks any meaningful new development. Back in the 1960’s, 1970’s, and 1980’s, there were huge new housing developments under construction all over the county. And in the 1990’s, Carmel Valley was built out but today, there are very few new housing developments being created. I read that San Diego needs a minimum of 100,000 new housing units just in the short-term to keep up with natural population growth, but that is not happening. Our housing supply is somewhat fixed or growing very slowly but with demand continuing to grow annually. Many people in their late 20’s and 30’s are making good money in San Diego (in healthcare and high tech jobs for example) and are searching for property ownership. Mortgage rates in the 5 or 6 percent range will not deter these buyers.

Many people are purchasing homes as rental properties in order to have an investment that protects against the inflation that may be occurring for quite a few more years, further increasing demand for housing. Another issue is no one is selling! People are holding onto their properties with mortgage rates in the 3’s. Inventory is still ridiculously low. The United States Federal government is sitting on $30 trillion in debt. As rates rise, interest in that debt greatly increases, causing more budget deficits, and more debt resulting in a weaker dollar and likely continued inflation. “A dollar won’t be worth a dime.” Expect home prices to continue to rise.

Continued Real Estate Trends for June 2022

MARKET REPORT (single family homes): 92115 – College Area, the median home price hit $1,100,000 which is a 25% increase since the beginning of the year. 92119 – San Carlos, the median home price for May was $1,075,000, a 17% rise since the beginning of the year. 92120 Allied Gardens, Del Cerro had a median price $1,157,000, a 10% rise since the beginning of the year.

Call me for a no obligation chat about your real estate plans. Read more about Sarah Ward: here.