What is happening in the San Diego real estate makert in November 2021? Kyle Whissel gives this housing market update and explains why these numbers are the lowest we've ever seen in history.
What's going on in the San Diego real estate market in 2021, the month of November?
I'm Kyle Whissel with Whissel Realty Group, and today we're going to dive into the numbers, the data behind what's actually happening in the market. And what I want you to do is throw everything you've heard in the media out the freaking window, because the problem is the media a lot of times is looking at delayed stats and/or looking at nationwide stats.
And what I want to do today is let's focus on the leading indicators of what's happening today with the data, and I want to be very specific to San Diego because San Diego is very unique from Austin, Texas, from Orlando, Florida, from New York City. These are all very, very different places. So let's dive into it.
There are four numbers that we always like to look at when we look at what's going on in the market.
First and foremost is the number of new homes that have come on the market for sale. This is the most surprising number of everything we're going to cover today. The reason is that the number of new homes on the market is down about 29% from this same time a year ago. Now, when we look at that, we could say, well, hey, there's been some things going on in the world the last year or two so maybe that's just relative to last year, which was a fluky year. So what I decided to do is let's go back to 2019. You know what, let's even go back to 2018. Heck, let's go back to the last 10 years. This is the lowest number of new homes that have come on the market this time of year as far back as my data shows. So very, very interesting to see there are a lot fewer people putting their homes on the market for sale.
Next up, I want to look at is the number of homes that have gone pending or gone under contract. That number is down 6%. So that's kind of expected. We know the market has shifted a little bit and slowed down, but if we think about that, we had a 29% drop in new homes on the market and only a 6% drop in homes going off the market. So what we're seeing is we're still seeing the supply of homes in San Diego shrink.
In fact, it's down 53% from this same time a year ago. There are far fewer homes for sale today than there were a year ago. In fact, we're at the lowest level of homes for sale that we've ever seen in San Diego. So there are very, very few homes out there for sale. As a result, homes are selling quicker and they're selling for more money. So where a lot of the media right now is talking about the market's slowing, things are calming down, we might be crashing, that's not happening in San Diego.
When you have inventory shrinking the way that it is here in San Diego, there's only one way that prices can go and that's up. As long as we're sitting, right now we're at 0.8 months of inventory. So what that means is that in a matter of 20 something days, we would run out of homes for sale in San Diego if nothing else came on the market. That's crazy. In a normal world, we're sitting at four to six months. We're sitting at 0.8 months right now. So there's a huge shortage of homes for sale. As a result, prices are continuing to rise.
Now, are they going to rise as much as they did over the last 12 months in the next 12 months? I don't think so, but I know that they're going to rise.
Thinking about buying a home in San Diego?
And so when you're watching this video, you're probably thinking to yourself, "Well, I'm thinking about buying a home, should I buy, what does this mean it's a good time or is it a bad time? Am I too late?"
Well, you're not, because when inventory is this low, there's only one way prices can go. My personal belief is over the next 12 months, you're going to see roughly 8% appreciation over the next 12 months, and I'm going to give myself 2% swing one way or the other. So I think you're going to see somewhere in the neighborhood of 6% to 10% appreciation in prices over the next year.
So, should you buy? Hell yeah you should buy. Buy now, the rates are near the lowest they've ever been in history. I'm refinancing a bunch of my own properties right now. Take advantage of these low rates and you're in the path of appreciation where you're going to buy and you're going to watch the value of your home go up as opposed to watching your rent go up because you're probably experiencing that right now if you're renting.
Rents, coming out of what we've been through recently, are skyrocketing. I saw a new apartment building get built in Mission Valley, they're charging like four grand for a two-bedroom apartment. Like, that's absurd. You could take four grand and you could buy like an $800,000, maybe a million-dollar house, the hell do you want to live in an apartment for four grand a month? That's crazy.
Thinking about selling your San Diego home?
So second thing, if you're thinking about selling, so there's some scenarios where that's going to make sense right now and there's some that it's not. The one that is not going to make sense to sell right now is to sell and go rent a stupid $4,000 a month apartment. That's a bad move right now, because if you sell right now, yes, you're going to made a lot of money and you're going to be really excited, problem is, you're going to throw a bunch of money away moving forward 'cause you're going to spend it all on rent and you're going to watch the value of your home increase. You don't want to be in that scenario, so that would be a scenario I would not recommend selling.
Where I would recommend selling is if you are looking to move up and you want to get into a larger home, what we're seeing is that the inventory is the tightest at the lower price points and it starts to open up a little bit more at the higher price points. So if you're maybe got a $700,000 house and you want to get the million dollar house, probably going to be a good scenario for you, or if you're just ready to get the heck out of California for whatever reason, we're not going to judge.
A lot of our clients are moving to Arizona, just talked to someone moving to Prescott today, or you're moving to Nevada, to Las Vegas or Reno, or you're going up to Idaho, to Boise or Couer d'Alene or wherever it is you want to go, we would love the opportunity to help you. We've got an amazing network of top-performing agents all across the country and we can help you sell your home here and get top dollar and move to that dream home and that city or state that's going to be perfect for you and your family.
So if you're in that scenario, whether you want to buy it, you want to sell, we'd love that opportunity to help make it happen for you. Give us a call or shoot us a text at the number below. I'm Kyle Whissel with Whissel Realty Group, thanks for watching.
