What is the current state of the San Diego Housing Market? And how if the high demand for homes and low inventory affect the sales and pricing of homes on the market?
San Diego Real Estate Agent Kyle Whissel, breaks down some of the numbers of the San Diego Housing Market for the month of May 2021. Using leading indicators to discuss the current state of the market, and what he is seeing for next coming months.
San Diego Housing Market Update May 2021
What's going on with the San Diego real estate market in May of 2021. Hey, there it's Kyle with The Whissel Realty Group and I am here to give you your 2021 May market update for San Diego, California.
Before we dive into the numbers today, and what's going on, the key we've got to remember as we're looking at data from April of 2021 versus April of 2020. Well, if we think back to April of 2020, that was our first full month of fully being locked down. So, we've got to take all of that into consideration when we compare this year's numbers versus last year's numbers.
We don't want to give you all the same stuff the media is reporting, which is a lot of the lagging indicators or the things that happened months ago. We want to help you understand what's happening in the market actively today with the freshest data we've got.
San Diego Housing Inventory
First thing we always like to look at is the number of new homes that have come onto the market for sale. And what you're going to find there is that's up to you 28%. But that's pretty logical. There should be an increase, right? Because a year ago, first full month of lockdown nobody was doing anything, right. We were all just trying to figure out what is this new world? What's going on? Can I even go outside? I remember we were having groceries delivered and my wife was like, making sure the boxes stayed outside for days before we brought them in the house.
Like it was a little crazy back then. Fortunately we're coming out of the back end of this thing and things are starting to open back up. So it's only logical that we would have some more homes coming onto the market. But, Here's the big one, is the number of homes that have gone pending or gone under contract is up 87.7%. So yes, we've had a little bit of an uptick in the number of homes that have come on the market, but we've had a massive uptick in the number of homes that have gone off the market or gone under contract.
So what happens is when you have this gap here of new homes on the market versus homes off the market, this gap is a shrinkage of the supply of homes for sale, which is what you're probably hearing about from your friends, your family, at the party, on the news. You're hearing the supply is down. And it's down massively. In fact, it's down 69.6%. There are a huge shortage of homes for sale right now in San Diego. What's that doing?
Is it's causing the amount of time it takes to sell to drop significantly, that's down 23%. So there is definitely a lot less homes actively on the market today. But the key is the number of homes for sale is actually up 28% from a year ago. So there's more stuff coming on the market, it's just getting gobbled up extremely quickly. A big part of that is because interest rates are at or near the lowest they've been in history. We're seeing rates in the low three, sometimes even the high twos right now which are the lowest rates we've ever seen. So things that are causing that is low rates, buyers are getting excited.
They're jumping on every property that comes out there. Everybody's just ready for a new home. They're ready for a change. They want that extra bedroom. They want the pool. They want the view. They want all of the space, the yard. So a lot of people are moving.
Thinking About Buying?
So if you're thinking about buying a home, what does this mean to you? What it means is it is a great time to buy. And you're probably like, well, Kyle, prices are already up a ton. In fact, they're up over 20% over the last year. Like, isn't it like a bubble? Isn't this thing going to pop? It's not, because here's what's happening is the bubble that we had back in the mid two thousands was because they gave people like me alone for half a million dollars when I scooped popcorn at a movie theater. I had no business getting a half a million dollar loan.
Today, the people who were buying homes have the down payment to buy the homes. They actually have the income to buy the homes. In fact, a lot of the homes that are being sold are being sold to cash buyers. I'm writing an offer on one for a client right now, listed at 1,050,000 and there's like 10 cash offers on it. So the thing is what's happening today is simple supply and demand economics, shortage of supply, surplus of demand causes prices to go up. Well, with the shortage of inventory that we have today that's going to continue to skyrocket prices. In fact, I'm buying a home myself. I'm actually closing escrow in a week from shooting this video. So I have a lot of confidence in the market. You should to making an amazing time to buy, buy in the path of progress. Buy when values are on the upswing.
Selling Your Home
So if you are thinking about selling your home, what does this mean to you? Well, there's a couple of different scenarios you could be in. You could be in scenario one, which is you're selling and you're getting out of state. Smart move, right. Sell right now while prices are super high, go somewhere else, prices are a lot lower you get a lot more for your money. Great for that. Scenario two is you're looking at moving up.
So you're selling maybe your $600,000 house and buying the million dollar house. Well, the good thing is the market's way more competitive at 600 than it is at a million. So you get to sell were super competitive buyers bid the price up. Now you go buy that dream million dollar home. So it's fantastic time for that because now instead of a $600,000 asset, you've got a million dollar asset and prices are going up, which is great.
You want the bigger asset in that scenario. The one scenario might not make sense to sell is if you're thinking about I'm going to sell it, I'm just going to rent for a while. I'm going to wait for the market to crash. Market is not crashing anytime soon. It's not going to happen. It might as well hold on to the property because values are shooting up right now. So the one scenario where I don't think it makes sense to sell is if you want to sell and go rent, because you're going to sell and you're going to kick yourself in the ass a few months from now, when you look at that $600,000 place you sold and realize next year, that things selling for $700,000. So that's the one scenario we might not want to sell.
If you're watching this, you're thinking about buying, you're thinking about selling. We'd be honored for the opportunity to help you. You can call or text us 655-3400. Thanks so much for watching Kyle Whistle with Whissel Realty Group.
