The San Diego real estate market remains at the forefront of California’s housing industry. Local housing prices are roughly three times the national average, and the current pandemic’s pent-up demand has sparked a solid level of activity. Pending sales are increasing, despite unprecedented values caused by competition. While housing remains sturdy, it appears that an equal proportion of sellers lack the confidence to list their homes on the market. Prices have consistently increased over the past year, and there is no reason to believe that this trend will cease. 

Prospective homeowners and long-time investors may also view the new disturbance in the San Diego real estate market as an opportunity, rather than a challenge, in 2024. Landlords, in particular, may have the best opportunity to benefit from the changing terrain produced by San Diego real estate market developments. 

Market Projections for 2024

Looking ahead, several key elements will shape the San Diego real estate market in 2024. Continued process growth, favorable lending situations, and demographic shifts are expected to underpin housing demand. 

However, challenges, along with delivery constraints, affordability pressures, and economic uncertainties, may also temper San Diego real estate growth to some degree.

San Diego Real Estate Analysis 

According to the most recent US News Home Market Index, San Diego is ranked 15th out of 57 major home markets in the United States. This strategy reflects the city’s relative stability and potential for development in the following months. To gain a comprehensive understanding, it is essential to examine both the strengths and weaknesses that contribute to this rating.

According to the California Association of Realtors (C.A.R.), existing single-family home sales in California were 224,000 on a seasonally adjusted yearly rate in December, level from November but down 7.1 percent from December 2022. 

The statewide median house price in December was $819,740. This number showed a modest decline of 0.3% from November, but a significant rise of 6.4% from December 2022.

San Diego has a favorable ratio of permits issued for new housing units to household growth. This implies a proactive approach to meeting housing demand, which may stimulate further development and economic activity. 

Housing Finance Indicators 

According to the U.S housing index indicator, San Diego’s price-to-income ratio is 0.35, up slightly from last year. This measure is critical for determining housing affordability, with lower ratios often indicating better circumstances for potential buyers. 

Similarly, the rent-to-income ratio increased slightly, reaching 0.36. This measure provides information on the affordability of rental homes in relation to income levels, which in turn influences rental market dynamics. 

Housing Demand Indicators 

San Diego’s employment data indicate a healthy trend, with a significant year-over-year increase. An expanding job market is often associated with increased housing demand, as people seek residential accommodations near their employers. 

Despite the generally positive employment trend, San Diego’s unemployment rate has increased slightly. Monitoring this measure is critical, as it affects consumer spending power and housing market activity. 

Consumer mood in San Diego has improved significantly since last year. Optimistic consumer outlooks often lead to increased spending and investment, including purchases of San Diego real estate. 

Mortgage Rates

Mortgage prices are expected to have a significant impact on the decline in property fees. Interest rates have a significant impact on the real estate industry, affecting mortgage rates, housing demand, and pricing.  

Zillow, a primary participant in real estate facts and forecasting, has updated its home value projection for 2024. This change will be influenced by expectations of increasing mortgage rates and a slight decline in the San Diego Realtor market’s tightness.  

Zillow now predicts that the national Zillow Home Value Index (ZHVI) will increase by 4.9% from August 2023 to August 2024. This represents a drop from the closing month’s forecast, which had expected a 6.5% increase from July 2023 to July 2024.

Changes in new listings and inventory 

The month of August saw a sudden surge in for-sale listings hitting the market, a trend that began in the summer season. New listings expanded by way of 4.0% from July to August. This rise is significant, as it marks the first time in Zillow’s history that the number of listings has increased over a month.  

However, it is essential to note that, even as the upward trend in new listings and common for-sale inventory helped to alleviate market conditions, both remained significantly lower than before the pandemic. Overall, stock occasions will stay pretty tight.

Interest Rates 

It’s vital to monitor interest rates, as they considerably impact loan affordability and homebuying choices. With interest rates currently standing at 7.62% and experiencing a moderate boom over the years, buyers will need to assess their borrowing capacity and explore financing options as a result.