In this comprehensive analysis, Kyle Whissel of Whissel Realty Group offers an insightful look into the San Diego real estate market as 2023 wraps up and shares predictions for 2024. This blog post is a must-read for real estate agents seeking to navigate the market's complexities and opportunities.

The Roller Coaster of 2023

The year 2023 in San Diego's real estate sector was a roller coaster, starting with a fervent market where buyers fiercely competed and property values skyrocketed.

Early 2023: A Market On Fire

  • Rapid Growth: From January to June, San Diego saw a property value increase of 15 to 20% in just six months.

  • Multiple Offers: The early months were characterized by multiple offers on most homes.

Mid-2023: The Interest Rate Spike

  • Interest Rate Hike: Rates jumped from 6% to around 8%, leading to a sudden cooling off in the market.

  • Impact on Home Values: This resulted in a slight decline in home values towards the year's end.

The Current State of the Market

As 2023 ends, the San Diego real estate market faces a unique stalemate, marked by:

  • High Interest Rates: Buyers are hesitant due to high rates.

  • Seller Reluctance: Potential sellers are holding back because selling now would mean buying at higher rates.

Impact on Sales

  • Decreased Home Selling: The number of homes sold has significantly dropped compared to the previous year.

Looking Ahead: 2024 Market Predictions

The real estate market in 2024 is likely to be heavily influenced by mortgage interest rates.

Interest Rate Projections

  • Potential Rate Decrease: Expectations lean towards a decrease in mortgage rates in 2024.

  • Federal Reserve's Role: Predictions suggest the Fed might lower its rate 4 to 6 times during the year.

Market Reactions

  • Increased Buyer Activity: Lower rates could bring more buyers into the market.

  • Sellers' Market Participation: As the rate gap narrows, more sellers might enter the market.

Transaction Trends

  • Higher Transaction Volume: 2024 is expected to see more real estate transactions.

  • Move-Up Buyers: Sellers moving up won’t significantly affect inventory since they’ll also be buying.

Predictions for Home Values

  • Stable Appreciation Expected: A 10% increase in home values is anticipated, considered more sustainable than extreme fluctuations.

Advice for Buyers and Sellers

As the market evolves, strategies for buyers and sellers must adapt.

For Buyers

  • Current Opportunities: With less competition, buyers can be choosier.

  • Refinancing Strategy: Buyers can refinance later when rates drop.

  • Anticipating Competition: Waiting might lead to a more competitive market.

For Sellers

  • Timing Considerations: Sellers might consider advancing their timeline to avoid future competition.

  • Rate Negotiations: Sellers can negotiate with buyers on rate buydowns.

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