A Rise in Inventory

The short-term outlook for the housing market looked slightly more positive as interest rates moderated throughout the month of June and the supply condition continued to improve in the last couple of months.  With the job market showing signs of cooling in recent weeks, the economy could slow further in the next two quarters.  While the growth momentum could be cooling off for the U.S. economy, the housing market could benefit from the slowdown if the Federal Reserve reacts accordingly and starts reducing the policy rates in the near term.  


Housing supply has been slowly improving in the first half of 2024 and the diminishing lock-in effect could be a contributing factor to the increase in inventory.  According to data released by Intercontinental Exchange Inc. (ICE) - a financial service company that provides mortgage technology, data and listing services, 76% of homeowners who didn't own their homes outright had mortgages below 5% in May 2024, a drop from 90% recorded two years prior.  As rates are projected to moderate in the second half of 2024, further improvement in the supply side could be observed before the end of the buying season.  


Market data provided by First American Title compares June 2023 vs June 2024.  Closed sales were down 7.6% from last year, new listings were up 6.9% from last year but the median sales price of $950,000 was up 10.5% from last year.  Overall inventory of homes for sale ending June 2024 was 4,355 which is 44.4% more than June 2023.  The surge in home prices coupled with robust sales activity suggests that the San Diego housing market is among the hottest in the nation.  Even with rising inventory, San Diego's strong fundamentals suggest continued appreciation.  The combination of a desirable location, a robust economy and limited inventory positions San Diego's real estate market for ongoing growth.  


Pricing a home appropriately remains key for success in today's market as many homes are still receiving multiple offers.  With that said, many homes that are overpriced continue to sit.  It is very important to track sales in the last 90 days to truly understand a home's value in today's market.  Call me at 858-220-6412 so we can set a meeting to discuss your plans / timing to buy or sell.