Are you wondering what direction the housing market is going in? San Diego realtor Steven Wener discusses some of the leading indicators that will be affecting the housing market going into 2022.

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What is the Direction the Housing Market is Going in?

Hi, I'm Steven Wener, of Whissel Realty, brokered by eXp. And, today what I wanted to talk about, where's the market going? So, for those of you that have been watching the "Insanity", since roughly 2019, when everything changed in not just our world, but our marketplace. Everybody got scared, and everyone was staying home. And, the first three, three and a half weeks of when the pandemic started, everything started to shut down.

Real estate wasn't even an essential service. Once that blip was done, and the market started to figure itself out, inventory was depleting daily. Now, if you just know the simple rule of supply and demand, when there is a high demand, and no supply. What happens? Through scarcity, things start to skyrocket. There was no difference in the real estate market here in San Diego, and inventory levels started to dwindle. Every single month, I would do inventory counts, and for the longest time, we were hovering at about 2.2 to 2.5 months of inventory.

Meaning, if not one more for sale sign went up. We would be out of inventory in two, to two and a half months. A healthy market is roughly five to six months of housing inventory. We're hovering under one month of inventory for the longest time in San Diego county. So, it's created bidding wars. And, what we started to see were insane offers that were coming in dramatically over the asking price. And, the other thing we started to see was how much cash was coming into San Diego. So, when we look at, where is this market going?

As long as interest rates stay relatively low, which they have been. And, inventory levels, stay at the levels that they're at. Roughly a month of inventory. Plus or minus a little bit. This rise is just going to continue. There will be blips here and there. Sometimes when we hit major holidays or when school's out, all of a sudden there's a transition. And, for a minute in this real estate market, if you're an active agent, you start to wonder what's going on. And, you start to call your other friends or people that you really associate with within this market.

And, you ask them the same question. What are you experiencing? Those blips are so short-lived, but because of the intensity of this market, just one minor change for a moment makes you think, okay, there's a shift, but there hasn't been. Because when you come back to the bigger picture of the supply and demand, just looking at economics, low-interest rates, we continue to see a rise. So, for the foreseeable future, we're not seeing a letdown or a let-up. What I would tell a lot of clients of mine, is if there's a property that you feel is challenged, this is the right time to sell it. Because people are compromising on what they're doing since there's so much scarcity.

And, that mindset is creating a lot of fear for people in this market. And, when people get out of logic, and they just deal with emotion, which again, this market has done, I have never seen in my career. And, I've been doing this since 1993, values, skyrocket the way they have, because people are putting offers in 10, 50, a 100, 200, I've even heard of $600,000 over asking price.

So, what is that doing? That becomes your new normal in the neighborhood. Those comps are there. If anybody in this market tells you what something is going to sell for, run, because it's impossible to predict what somebody is about to do. So, for those of you that are wondering, where are we going in San Diego? It's very hard to predict the amount we're going to keep rising too but think about this. There is no let-up.

There is no slowdown, not in the foreseeable future. So, be prepared to work with somebody who's going to get it right. So, that they can take care of your needs sooner than later. Because once you get into the property that you're after, think about it. There's almost instant equity. I'm Steven Wener of Whissel Realty, brokered by eXp. Have a great day, thank you.

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