San Diego realtor Kyle Whissel breaks down the leading indicator for the month. Discussing how the days on market and quickly selling inventory, will only further continue to drive up home prices, due to lack of supply.

San Diego Housing Market Update June 2021

What's going on with the San Diego real estate market, June of 2021? Hey there, it's Kyle with the Whissel Realty Group. And today I want to talk to you a little bit about what's going on here in San Diego, June of 2021.

We like to do this is look at the leading indicators. These are the things that are happening today in the market that are telling us what's going to happen in the market in the months to come. I want to make sure we don't look at the same numbers that the traditional media looks at which are the lagging indicators. Things like average sale price, number of homes sold, things like that, because that's data that cannot be reported until it's completed.

Then the data is reported a month, two, sometimes three months after it actually happens. So, though it's old data, I want to look at the new data, or the leading indicators that tell us where the market is going.

New Homes on the Market

Number one thing I like to look at is the number of new homes that have come onto the market for sale. I think it's important when we look at this number, that we adjust for the COVID factor. We've got to think back, back to may of 2020, and we got to think what was happening in the world at that time, we were still deep in the trenches of COVID, at that point, a lot of people uncomfortable putting their homes on the market. So naturally the number of homes for sale then was going to be lower than what it would have traditionally been.

Well here's what's crazy, the number this May was even lower than last May. So May of 2021 had less homes listed, than May of 2020 in the middle of COVID. We're kind of on the way out of this thing now, we were right in the middle of it. So, that's kind of crazy, there's less homes this year than last year, when last year had a big COVID effect to factor in.

Supply of Homes

Now, on the flip side of things, we know there was less homes coming on the market. How many went off the market? 23.9% more homes went off the market or went under contract last month versus a year ago. So, less homes on the market, more homes off the market, naturally that's shrinks the supply of homes for sale. In fact, that's down 65.2%, so there's a massive shortage right now of homes for sale.

Then last thing I like to look at is days on market. How many days is a home sitting on the market before it goes under contract? That's down 28.6. It's kind of what you would expect, right? If there's less homes for sale, naturally they're going to sell a little bit faster. There's less than one month supply of homes for sale right now. It's kind of crazy. Traditionally, we've got four to six months as normal, so we've got a quarter to what is at 0.17% of what we should have right now. It's it's pretty wild right now.

What does this mean to you, right? You're watching this video, you think, "Okay, that's a lot of numbers, "that's a lot of data. "Well, how does this affect me?" Well, if you are thinking about buying a home in 2021, here's what you got to know. Interest rates are still historically low. I personally just bought a home myself, so hopefully this helps a little bit, right? If I'm buying a home and I know all of this and my degrees in economics, it's probably tells you what I think is going to happen in the market, I think values are going to continue to shoot up.

I think will see 20% appreciation over the next 12 months, and I'm confident in that, feel free, fact check me 12 months from now, shoot me a message, if I'm wrong, call me out on it, please do. I believe prices are going to continue to shoot up. I think we'll see close to 20% appreciation over the next 12 months, and you're able to lock in historically low interest rates. So, with that said, wouldn't it make sense to buy, right? Would you want to wait that values go up 20%? Let interest rates go up, and that will costs you exponentially more money? Probably not the best idea to wait.

You Should Buy Now

If you're thinking about buying, you should do it now before prices go up before interest rates go up. And then on the flip side, if you're thinking about selling, well, does it make sense to sell? It depends, this one's not an easy answer. If you are selling and you're moving out of state, that's probably going to make some sense, right? You're going to need to get the money out of your home here, to go buy your home in another state. The beautiful thing is when you sell here, you're going to be able to sell for a premium because there's not enough homes for sale.

Maybe you're moving somewhere else where there's a little bit more supply of homes for sale. So sell here where it's crazy, buy somewhere else where it's not crazy, that's going to make sense. If you're going to stay here, it's going to make sense if you're going to be moving up to that bigger home. So let's assume you own the million dollar house today, and you're thinking about selling it to buy a $2 million house. Well, that's probably going to make sense too, right? If I'm either holding a million dollar house, or a $2 million house, I know values are going to increase, I'd rather be holding the $2 million house than the $1 million house, so that makes sense.

When does it not make sense? To just sell and sit on the sidelines. I've got clients to say I'm going to sell, and I'm just going to rent for a little while, why? If values are going to continue to go up, why would you just sit on the sidelines? That's crazy. So if you're thinking about selling, and just sitting on the sidelines for awhile, I think you're going to make a mistake 'cause you're going to sell that house. Let's say you sell for a million dollars, when we sit back and look at the situation a year from now, that home's going to be worth 1.2 million, so you're going to have lost out on $200,000 of appreciation.

And then you're going to have paid a ridiculous amount of money for rent because rent is higher than it's ever been right now as well. If you're watching this video and you're thinking about buying or selling, our team would love the opportunity to help make that happen for you. Give me a call at the phone number down below, we'd love to set up a free consultation to ensure this makes sense for you and for your family. Thanks so much for watching, I'm Kyle Whissel, with Whissel Realty Group.

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