San Diego Housing Market Trends and Forecast for 2024

The surge in home prices coupled with robust sales activity suggests that San Diego is currently a seller’s market. Low inventory levels and high demand from prospective buyers contribute to increased competition, giving sellers the upper hand in negotiations. However, it’s essential to note that market dynamics can vary depending on specific neighborhoods and property types. Buyers may still find opportunities in certain segments of the market, but overall, sellers hold the advantage in San Diego’s housing market at present.

How is the San Diego housing market doing currently?

According to the California Association of Realtors (C.A.R.), existing, single-family home sales in the state totaled 290,020 in February, marking a significant surge of 12.8 percent from January’s figures. This upswing in sales represents a commendable 1.3 percent increase compared to February 2023, showcasing steady growth in the housing sector.

The statewide median home price for February stood at $806,490, exhibiting a modest yet encouraging rise of 2.2 percent from the previous month. Furthermore, this figure reflects a robust 9.7 percent increase from February 2023, underlining the sustained appreciation of home values across California.

San Diego County in Focus

Turning our attention specifically to San Diego County, the housing market presents compelling data for prospective buyers and sellers alike. In February 2024, the median sold price of existing single-family homes in San Diego surged to $980,000, marking a substantial increase of 5.9 percent from January’s figures. Comparing year-over-year data, this represents an impressive 11.6 percent uptick from February 2023, emphasizing the steady appreciation of property values in the region.

Additionally, sales activity in San Diego County experienced a notable uptrend, with a month-to-month increase of 20.9 percent and a year-over-year growth of 8.1 percent. These figures signify heightened demand and market activity, indicating a favorable environment for both buyers and sellers in the region.

Regional Comparison

Zooming out to assess the broader regional trends, Southern California as a whole also reflects positive market dynamics. With a median home price of $825,000 in February, the region witnessed a commendable uptick of 5.0 percent from the previous month. Comparing year-over-year data, this represents a robust 10.8 percent increase, showcasing sustained appreciation in property values.

Moreover, sales activity in Southern California exhibited significant growth, with a month-to-month increase of 14.7 percent and a year-over-year uptrend of 7.0 percent. These statistics underscore the resilience and vitality of the housing market across the Southern California region, including San Diego County.

Forecast for 2024

As we look ahead to the remainder of 2024, the San Diego housing market appears poised for continued growth and stability. Favorable market conditions, including low inventory levels and sustained demand, are expected to drive further appreciation in property values. However, challenges such as rising mortgage interest rates may temper the pace of growth, necessitating careful monitoring and strategic decision-making by buyers and sellers alike.

Are Home Prices Dropping?

Despite occasional fluctuations, there is no evidence to suggest a significant drop in home prices in San Diego. On the contrary, the data indicates a consistent upward trend in property values, with median prices steadily appreciating over time. Factors such as limited housing supply, strong demand, and favorable economic conditions contribute to the sustained appreciation of home prices. While localized variations may occur, the overall trend suggests that home prices in San Diego are unlikely to experience a substantial decline in the near future.

San Diego Housing Market Forecast for 2024 and 2025

According to Zillow, the average home value in the San Diego-Carlsbad area currently stands at $924,365, marking a 9.3% increase over the past year. Homes in this region also tend to go pending within approximately 15 days, indicating a fast-paced market.

Key Metrics Explained

For Sale Inventory: As of February 29, 2024, there were 4,080 properties listed for sale in the San Diego area. This metric provides insights into the available housing stock within the market.

New Listings: In February 2024, there were 1,668 new properties listed for sale. This figure reflects recent additions to the housing market and can indicate market activity levels.

Median Sale to List Ratio: As of January 31, 2024, the median sale to list ratio in San Diego was 1.000. This ratio compares the final sale price of a property to its original list price, providing insights into pricing trends and negotiation dynamics.

Median Sale Price: The median sale price of homes in San Diego was $832,500 as of January 31, 2024. This figure represents the middle value of all home sales in the area and is a key indicator of market affordability.

Median List Price: The median list price for homes in San Diego stood at $926,500 as of February 29, 2024. This metric represents the midpoint of all properties listed for sale and reflects seller expectations regarding pricing.

Percent of Sales Over/Under List Price: In January 2024, 41.3% of home sales in San Diego were above the list price, while 44.8% were below the list price. These figures illustrate market competitiveness and negotiation dynamics between buyers and sellers.

Market Size and Significance

The San Diego housing market encompasses a diverse range of properties, including single-family homes, condominiums, and luxury estates. With its attractive climate, strong economy, and vibrant cultural scene, San Diego continues to attract buyers from diverse backgrounds. Its proximity to the Pacific Ocean and renowned universities further contribute to its appeal.

Will the San Diego Housing Market Crash?

While predicting market crashes is challenging, there are currently no imminent signs of a housing market crash in San Diego. However, it’s essential to monitor economic indicators, interest rates, and housing inventory levels for any potential shifts in market dynamics.

Is Now a Good Time to Buy a House in San Diego?

For prospective buyers considering entering the San Diego housing market, the decision depends on individual circumstances and long-term goals. While market conditions may be challenging due to competition and rising prices, favorable mortgage rates and lifestyle preferences may still make it a good time to buy for some.

Greater San Diego Area Housing Market Report

The Greater San Diego housing market, as detailed in the recent report by the Greater San Diego Association of REALTORS®, shows divergent patterns in closed sales, pending sales, inventory, median sales prices, days on market, and supply underscore the complexity of the market dynamics.

Closed Sales and Pending Sales

In the recent period, closed sales have shown a notable increase, with detached homes witnessing a rise of 2.3 percent, while attached homes experienced a more significant surge of 14.3 percent. Similarly, pending sales have also seen positive growth, with detached homes up by 1.0 percent and attached homes by 2.5 percent. These figures underscore the sustained interest of buyers in the Greater San Diego Area housing market.

Inventory and Supply

Despite the uptick in sales, the inventory landscape has displayed some divergence. While detached homes saw a decline of 11.5 percent in inventory, attached homes witnessed a contrasting increase of 20.5 percent. This indicates a shifting balance between supply and demand, particularly in the attached home segment. Moreover, the supply of detached homes increased by 7.7 percent, while attached homes experienced a more substantial surge of 45.5 percent.

Median Sales Price and Days on Market

The median sales price in the Greater San Diego Area has demonstrated an upward trajectory, reflecting the persistent demand and limited inventory. Detached homes recorded a notable increase of 16.1 percent, reaching $1,043,900, while attached homes experienced a more moderate rise of 7.0 percent, reaching $662,000. Additionally, days on market have decreased significantly, with detached homes witnessing a decline of 27.9 percent and attached homes by 20.5 percent. This reduction underscores the swift pace at which properties are being sold in the current market environment.

Implications for Buyers and Sellers

For prospective buyers, the competitive nature of the market underscores the importance of acting swiftly and decisively. With declining inventory and increasing median prices, buyers may face heightened competition and should be prepared to make compelling offers to secure their desired properties.

On the other hand, sellers are poised to benefit from the favorable market conditions, characterized by rising prices and reduced days on market. However, sellers should remain cognizant of the evolving dynamics and work closely with their real estate agents to optimize their listing strategies and capitalize on the current market momentum.

San Diego Rental Property Market

The San Diego real estate market has been ranked among the ten most expensive real estate markets in the country, though it ranks below several other West Coast cities. This creates massive demand for San Diego rental properties by those who simply cannot afford to buy homes.

The rental market will continue to grow as the city grows an estimated 500,000 population by 2050, adding tens of thousands each year. The median rent in San Diego is $2700. The rent you’d receive on single-family San Diego rental properties would, of course, be much higher.

Renters vs. Owners in San Diego

San Diego’s property rental market is influenced by several factors, including the local economy, job opportunities, and the overall demand for housing. It’s a city known for its mix of urban and suburban neighborhoods, each with its own rental and ownership dynamics.

San Diego had a diverse housing landscape with a mix of renters and property owners.

• Renters: San Diego has a significant population of renters, comprising individuals and families who lease residential properties. This includes apartments, condominiums, townhouses, and single-family homes. The exact percentage of renters relative to property owners can vary by neighborhood and demographic factors.
• Owners: San Diego also has a substantial number of property owners. These are individuals or entities who own residential properties and may either live in their properties or lease them out to renters. Property owners contribute to the diversity of the city’s housing options.

Size of the Rental Market

The size of the San Diego property rental market is substantial, with a wide range of rental properties available to residents. This market includes apartments, houses, and various types of housing units. The exact size of the rental market can fluctuate based on factors like population growth, economic conditions, and housing development trends.

Real estate agencies, rental platforms, and government agencies often track and report on the status of the rental market, offering detailed insights into its size and dynamics.

For the most up-to-date and specific information regarding the current state of the San Diego property rental market, including the number of renters and property owners, it’s recommended to refer to the latest reports and data from sources like local real estate associations, government housing agencies, and real estate websites.

San Diego’s property rental market is an essential component of the city’s real estate landscape, offering a wide range of housing options to its diverse population.

San Diego County shows it has a Median Gross Rent of $1,842 which is the third most of all other counties in the greater region. Comparing rental rates to the United States average of $1,163, San Diego County is 58.4% larger. Also, measured against the state of California, rental rates of $1,698, San Diego County is 8.5% larger.

San Diego Apartment Rent Prices

As of March 2024, the median rent for all bedroom counts and property types in San Diego, CA is $2,795. This is +42% higher than the national average. Rent prices for all bedroom counts and property types in San Diego, CA have increased by 5% in the last month and have decreased by 7% in the last year.

Housing Units and Occupancy

In terms of occupied housing units, San Diego has the following distribution:

• Renter-occupied Households: Renter-occupied households make up 53% of the housing units in San Diego, indicating a significant presence of renters in the city.
• Owner-occupied Households: Owner-occupied households account for 48% of the housing units, highlighting a balanced mix of homeowners in the area.

Affordable and Expensive Neighborhoods

San Diego’s neighborhoods offer a range of rental prices, making it accessible for various budgets:

The Most Affordable Neighborhoods:

• Bay Park: The average rent in Bay Park is $2,135 per month.
• University Heights: In University Heights, the average rent is around $2,200 per month.
• North Park: North Park offers an average rent of approximately $2,273 per month.

The Most Expensive Neighborhoods:

• Carmel Valley: Carmel Valley is one of the more expensive neighborhoods, with an average rent of $2,942 per month.
• Mission Valley East: In Mission Valley East, the average rent can go for $2,894 per month.
• Mission Beach: Mission Beach has an average rent of $2,850 per month.

Popular Neighborhoods

Some neighborhoods in San Diego are particularly popular among renters:

• Mission Beach: Mission Beach tops the list with 1,115 listings, making it a sought-after area for renters.
• Pacific Beach: Pacific Beach is also a popular choice, offering 760 listings for prospective renters.
• Ocean Beach: Ocean Beach features 295 places for rent, making it a vibrant neighborhood for renters.

These insights provide a snapshot of the current rental market in San Diego. Rental prices have seen some fluctuations in recent months, with variations in different apartment types. The city offers a range of neighborhoods to suit different budgets and preferences, with a balanced mix of renters and homeowners.

References

• https://www.car.org/
• https://www.car.org/marketdata/data/countysalesactivity
• https://www.sdar.com/press-releases.html
• https://www.zillow.com/SanDiego-ca/home-values
• https://www.zumper.com/rent-research/san-diego-ca