Market Update - May 2023
Market Action Index - May 2023
Let’s all ride the roller coaster that is this housing market. Just as we were staring at home prices down YOY (year-over-year), they are back on the rise. In fact, median home prices jumped $75K.
From someone working in the field I can tell you that buyer demand is strong. I believe they’ve adjusted psychologically to the interest rates. I think most buyers are looking to get into a home with the idea that WHEN interest rates come down, they’ll refinance.
Did you know? 50% of households are housing cost-burdened in San Diego, meaning these households spend more than 30% of their income on housing costs.
If you feel you might be house poor… it’s because 50% of homeowners in San Diego are… scary thought!
Inventory is still very low so we’re seeing a swing back into a pretty heavy seller’s market. Many homes I’ve written offers on are going for over asking again. It’s not quite as wild as a year ago, but I’m still seeing similar signs of that again. Additional, spring inventory (and sunshine??!) may settle the market down.
“Median Home Prices jumped $75K in one month.”
HOT TOPICS
Mortgage Adjustment LLPA - there’s lots of debate as this has been in the news lately. The discount of the loan price adjustment for those borrowers who are less qualified is meant to be a way to make it more affordable. While the discount isn’t directly passed on to borrowers who are more qualified, one has to to think that those fees will need to be made up in other loans. There’s lots of opinions on this right now and it’s probably too soon to know exactly how this will all roll out. Stay tuned.
Renter’s Rights passed in city council - The city council passed more protection for renters. Some landlords are up in arms about the additional rights. If you’re a landlord OR a tenant and you’re curious, you can take a look at the detailed ordinance here.
FED raising rates - the Fed met this past week and decided to raise interest rates again by .25 point. It’s the 10th rate hike since March of 2022 and it’s the highest it’s been in 16 years. Most lenders anticipated the hike and therefore most of the adjustments have already been made. The Fed did hint that this will be the last rate hike for now as inflation numbers have dipped. I’m hoping for some relief on interest rates so that we can improve affordability for buyers.
Short Term Rental Enforcement begins - “Enforcement of the Ordinance will begin May 1, 2023; therefore, the City has not revoked any licenses due to complaints or violations of the STRO (short-term rental occupancy) regulations,” - the treasurer’s office said in a report to the City Council’s Community and Neighborhood Services Committee.
For those that don’t know, only Mission Beach ended up with a lottery for their STRO properties. The requests for licenses throughout the rest of the city did not hit the demand needed in order to conduct a lottery. As part of the licenses, STRO owners had to submit how many days they would be renting out their homes. As enforcement begins, we’ll find out if owners are playing by the rules.
Market Profile - May 2023
Buyers - be ready with everything including proof of funds, pre-approval, and the grit to get out there to find something that you love. It’s competitive and I will get you a home but we are going to have to fight for it!
Sellers - you are calling the shots. If you’re considering selling I would recommend it now. It’s tough to get much better than this environment. Not only will you (likely) have multiple offers you’ll likely be able to dictate contract terms for things like appraisal contingencies and move out dates.
All that being said, if you’re considering buying or selling, please give me a call and let’s talk about if it makes sense to do it sooner rather than later.
Cheers to sunshine! Have a great start to your summer!
P.S. I live on referrals (and will love you forever) if you send someone my way. It’s among the greatest compliments I can receive. I will treat them like family. Thank you in advance!
Brendan