3 San Diego Real Estate Trends On The Rise
Reviewed by: Brandon Brown
With low mortgage rates, high demand, and low supply, the U.S. has seen a historic real estate boom—and in 2021, San Diego was one of the hottest markets in the country.
If you’re looking to sell your home in this Southern California city, it’s important to understand the trends shaping the current real estate market.
Luckily, for those on the seller side, current San Diego real estate trends are in your favor. Here are three key trends you should be aware of in the seller’s market.
Real Estate Trends in San Diego #1—The Market is Red-Hot
In January, real estate experts forecasted that the San Diego market would outpace even the previous year’s meteoric growth in median home price. According to the San Diego Tribune:1
“Real estate analysts CoreLogic said the price of a single family home in San Diego County will increase 8.3 percent from November 2020 to November 2021. That means the median price of a single family home in San Diego could be around $776,000 by the end of the year.”
If the numbers had played out as expected, this would be the highest increase in the nation. But analysts massively underestimated pent-up demand across the country. Nor did they account for the massive impacts the Delta variant would continue to have.
Over the last year, housing prices skyrocketed, quickly exceeding January forecasts. As of last month:2
- The median home price in San Diego city was $809,206, representing a 27.79% year-over-year increase in housing prices.
- San Diego was the second hottest housing market in the country, with annual home price increases only lagging behind Phoenix, Arizona’s 32.41% year over year.
- 45% of available homes in this beloved Southern California city are selling above the list price, a 16% increase compared to the rest of the U.S.
According to the most recent forecasts, home values aren’t done appreciating, with predictions that home value appreciation in San Diego will experience another 11.8% growth through the spring of 2022.
Real Estate Trends in San Diego #2—Demand Is Sky-High
One of the primary reasons for increasing home prices in the San Diego market is related to Covid-19.
Put simply, there’s been a massive influx of non-San Diego residents flooding into the county with cash to burn. According to the San Diego Reader:3 “Local realtors say one of the most significant factors of heightened home sales is the arrival of interested San Diego home buyers from the San Francisco Bay Area and Silicon Valley, where the tech explosion years ago sent home prices skyrocketing.”
The pandemic demonstrated that employees—especially in high-end occupations, such as tech—could effectively work remotely from anywhere. And with onerous lockdown restrictions in tightly-packed metros like San Francisco and Los Angeles, there was a diaspora of wealthy people fleeing such places in favor of:
- More space
- Warmer weather
- Less regulatory strictures
- Cheaper home prices (relatively speaking)
Along these lines, San Diego’s outpaced California’s job recovery numbers, making it an even more desirable place for people to move to and find high-quality jobs. And as demand grew, it not only impacted prices, but shifted the entire nature of the selling process itself, dramatically lowering the average time to sell a home to 28 days, on average, and 21 days for homes priced below $750,000.
Per the San Diego and Orange County Housing Report:5
“Anything below 45-days indicates an insane, scorching hot housing market where buyers are tripping over themselves to be the first to see a home that just hit the seller’s market, multiple offers is the norm, and homes are selling above their list prices. In fact, according to the California Association of Realtors, 70% of all closed sales in the month of July sold above their asking prices.”
Real Estate Trends in San Diego #3—Home Sales are Falling
San Diego housing market trends are telling us that home sales just aren’t falling. It’s not just demand that is impacting prices, there’s also a supply crunch that’s squeezing the median house prices in San Diego upwards.
Put simply, there’s not enough available homes on the real estate market for each buyer. According to the San Diego Association of Realtors, properties for sale have decreased across all categories:6
| All San Diego Properties | |||
| By Price Range | 09-2020 | 09-2021 | Change |
| < $250,000 | 306 | 24 | -92.2% |
| $250,001–$500,000 | 1,123 | 314 | -72.0% |
| $500,001–$750,000 | 1,373 | 786 | -42.8% |
| $750,001–$1,000,000 | 807 | 624 | -22.7% |
| $1,000,001–$1,250,000 | 356 | 208 | -41.6% |
| $1,250,001–$2,000,000 | 689 | 343 | -50.2% |
| $2,000,001–$5,000,000 | 589 | 297 | -49.6% |
| $5,000,000+ | 190 | 157 | -17.4% |
| All Price Ranges | 5,433 | 2753 | -49.3% |
But these supply constraints aren’t simply limited to the lack of available homes for sale. It’s also due to a reduced rate of home construction, which has been exacerbated by county restrictions, inflation, and the rapidly increasing cost of building supplies.
Moving Forward with San Diego Housing Market Trends
If you are looking for the best time to sell a house in San Diego city, there has never been a better time to do so. We’re currently in the seller’s market to end all seller’s markets.
But what do you do if you want to sell your home, but there’s renovations that first need to be done?
That’s where FlipSplit comes in. We’re the newer, better way to sell your home. First and foremost, we buy houses, renovate them, then flip them. Once it’s done, we’ll share the profits with you.
Want to know how that works? Reach out today.
Sources:
- San Diego Tribune. Forecast: San Diego home prices to rise 8.3% in ’21. Most in the nation. https://www.sandiegouniontribune.com/business/story/2021-01-05/forecast-san-diego-home-prices-to-rise-8-3-in-21-most-in-nation
- San Diego Tribune. San Diego Home Prices Now Up 25 in a Year. https://www.sandiegouniontribune.com/business/real-estate/story/2021-07-27/san-diego-home-prices-now-up-25-in-a-year
- Zillow. Anticipated Inventory Relief Fails to Materialize in April (April 2021 Market Report). https://www.zillow.com/research/april-2021-market-report-29486/
- San Diego Reader. San Franciscans and others driving San Diego’s real estate. https://www.sandiegoreader.com/news/2021/sep/22/cover-san-franciscans-and-others-driving-san-diego/
- Orange County Housing Report. Orange County Housing Report: Unhealthy Pace. https://reportsonhousing.com/wp-content/uploads/2021/08/OCHousing-Aug-POP-21.pdf
- SDAR. Housing Supply Overview. https://sdar.stats.10kresearch.com/docs/hso/x/report?src=page
Reviewed by: Brandon Brown
As a long-time Asset Manager, Investor, Real Estate Agent, and Broker/Owner of BayBrook Realty in Orange County, Brandon Brown is one of FlipSplit’s lead Real Estate experts. Having worked on over 2,000+ real estate transactions, Brandon brings a depth of knowledge that ensures clients are appropriately treated with honesty and integrity. His insights and advice have been published in numerous blogs beyond FlipSplit, and he keeps a close eye on market trends and statistics, which are updated weekly on his social media pages. Outside work, you can find him participating and serving at church, cycling, mountain biking, surfing around Orange County and beyond, and enjoying time with his wife and two daughters.
