2024 Summer Housing Market Forecast in San Diego

As the market has changed significantly in the last couple of years, from the highs of 2020 to the rough period about a year ago, things have now leveled out, presenting interesting developments in the housing market. I’m John Gluch, the team leader of the Gluch Group, with teams in Arizona and San Diego. Let’s discuss what you can expect in these real estate markets this summer and beyond.

Starting with home appreciation, despite predictions of a market crash that haven’t materialized, homes have continued to appreciate. According to Case-Shiller numbers, which are slightly dated but still indicative, San Diego saw an 11% appreciation from November 2023 to January 2024, the highest in the US. Those waiting for a market crash will likely be disappointed as I don’t foresee any crashes soon, though some appreciation seems to be slowing.

A key indicator of future trends is inventory, which measures how many homes are for sale versus how many are being bought. In San Diego, inventory has been increasing, with a current supply of about two and a half months. This increase is partly due to sellers who were waiting for lower interest rates finally deciding to list their homes. Demand has remained relatively stable despite high interest rates, leading to a cooling of home price appreciation.

Another sign of market softening is the increase in price drops. Since early 2020, more homes are seeing price reductions, an indicator that the market is slowing as sellers adjust their expectations. The Cromford Market Index, which measures supply and demand, shows that while there was significant upward pressure on prices last year, it has since normalized, predicting a return to more typical appreciation rates.

Regarding transactions, the market has seen the lowest number of home sales in 30 years, indicating a transaction issue rather than a market problem. Many people are waiting for better conditions, but as it’s becoming clear that interest rates are not likely to drop significantly anytime soon, more people are likely to make their moves. The market cycle is transitioning from skepticism to hope, with increasing interest and optimism.

For buyers, my advice is to get in before rates drop and then refinance. Waiting for rates to go down might mean missing out on current opportunities, and rates could increase further. More properties are coming on the market, providing better selection. Historically, buying and then refinancing has been a better move financially.

For sellers, if you don’t need to sell, it might be best to hold on. However, if you’ve been waiting for the right time, now might be it, especially if you can rent out your current home while buying a new one. We’ve also adopted strategies from new home builders, offering buy-down programs to make our listings more attractive by offering lower interest rates.

Additionally, we have programs like the Rate Relief Program and the Affordable More Advantage Program, which provide financial assistance and incentives for buyers. These programs can make buying more affordable and help beat the rush when rates eventually drop.

If you’re considering buying or selling, don’t hesitate to reach out. We have access to all market properties and a private seller marketplace for those who prefer a quieter listing process. We’re here to help you navigate these changes and make the best decision for your real estate needs. We look forward to serving you. Reach out when you are ready.