Mortgage rates remain high but home prices in San Diego seem to be going down. New data from CoreLogic/DQNews shows the median home price in San Diego County dropped by 2.9% last month to $825,000.
This is the first time home prices in San Diego have gone down this year.
Jeff Tucker, a senior economist with Zillow, says this is a trend they are also seeing. “We are also seeing prices actually start to decline on a month over month basis in San Diego,” he said.
He said home prices are still a lot more expensive than they were last year but this cool down is bringing changes to the market.
“That’s reflecting a really rapid change in the dynamics of supply and demand in the market,” he said.
Rising mortgage rates, high-home prices, and little inventory a few months ago caused many buyers to press pause on their plans to buy a home.
But, Tucker said, sellers didn’t get the memo, “And they kind of kept listing their homes, and a lot of them have had to cut the list prices to find a buyer. That has just really rapidly kind of turned the tables and put a lot more bargaining power back on buyers’ side.”
Voltaire Lepe is a real estate broker with Lepe Tendwell Properties in San Diego, who thinks the market is slowly turning more neutral. “I’m seeing properties on the market a lot longer and I’m seeing buyers have some negotiating power,” he said.
Lepe said inventory also looks different compared to earlier this year. “Right now there’s about 4,500 homes for sale compared to the beginning of the year, [when] we had about 1,700 homes for sale,” he said. “So almost triple the amount of homes for sale. So buyers just have more negotiating power. They have a lot more options.”
When it comes to inventory, Zillow senior economist Tucker thinks current conditions favor buyers. “Is this the time to buy? ” he asked, and then answered, “These are better buying conditions than buyers have seen in a long time. They won’t be forced into a bidding war nearly as often as they would have even just five or six months ago.”
Tucker said the better question is if they can afford the still considerably high prices. “The prices are still very, very high. And mortgage rates are also very high. So those are two things that are still not great news for buyers,” Tucker said. “I think some buyers, putting those together, may still say ‘I can’t afford a mortgage at these rates and these prices, so I’ll still have to kind of sit on the sideline for a while.'”