The coronavirus has had devastating effects on public health in the US and the economy in general. Many well-known, large companies and small companies alike have gone out of business or filed for bankruptcy. Many people have lost their jobs, been furloughed or had their pay or hours cut. Things have not been good for the last 6 months.
We know that the real market has also been affected by the virus. But how exactly has the real estate market in San Diego fared through July? Let’s take a look at the market by-the-numbers:
So what do these numbers mean, and what are we as REALTORS seeing in the market right now? Here are some market highlights based on our observations:
- Inventory levels went down in many cases because prospective home sellers were concerned about the idea of having potentially infected people coming through their home for showings. Open houses have not been permitted since March – and for good reason. Owners who had to sell are still selling, but owners who were thinking of a lifestyle or other non-necessary move, are waiting-and-seeing how the virus behaves before they list and sell. Also, when sellers sell, they are usually back in the market as home buyers once they close. And with inventory being so low, sellers know they can’t sell and then have no place to go. So, they are staying put, and the cycle continues.
- People are reevaluating their needs at home. Many people are working from home and as a result, more and different – and in many cases, larger – spaces are needed. In some households, mom and dad both need an office space, and the kids need space for homework and virtual learning. We’ve received calls from clients who own smaller homes or condos, who felt a strong urge to upsize and to get into a home with more interior space and outdoor space as well. Sheltering in place for 5 months has gotten to everyone and many people feel they need more room to spread out and breathe.
- Overall, home prices are up in San Diego County. Here’s a look back to January 2017.
- Home prices between $375,000 – $589,000 (below the median price for the County), are actually down slightly since February. In February, the median price in this range was $500,000. In July, it was down to $497,200. Check out the interactive link here. This could be due to the unemployment rate being higher at lower income levels, so prospective buyers in this price range are holding off on their buying decisions or being prevented from buying a home until their employment status is more predictable.
So, where does the market stand in North San Diego County at the beginning of August 2020? Mortgage interest rates for a 30-year fixed rate loan stand at 2.82% as of today (8/7/2020) for A-paper borrowers, according to Mortgage News Daily. So, if you have solid employment, good credit and a down payment, you can take advantage of this lending environment and get a terrific deal. Looking at homes is quite an unusual experience, in that everyone must follow CDC guidelines and where PPE while in the home; and the home must be thoroughly cleaned after each showing. There will be no public open houses for the time being. Home prices and sales at the upper end are increasing, while inventory levels remain historically low. Along with most people, buyers at the mid-level and lower price ranges are concerned about their jobs, and sales activity and prices in these ranges are flat. Everyone remains concerned about the virus coming under control for good and there will be a mix of opportunity-seeking and cautious market dynamics for the time being.
Of course, this are changing rapidly – and it is an election year, which usually adds some caution into the market. So, contact us if you have questions about your situation and we would be happy to help you and guide you through this unusual time.
Kevin: 858-750-9577 | kevin.cummins@compass.com
