San Diego is #1

San Diego is #1!  San Diegans who own detached single family homes will be happy to hear that the value of their houses has continued to rise, more so even than any major city in the country.  San Diego home prices were up 8.8% year over year, according to the S&P/Case-Schiller Home Price Index for December 2023.  That's compared with a 5.5% increase nationally.  Supply and demand have everything to do with the outcome as do interest rates.  

The Federal Reserve has indicated that they will most likely drop the short term Federal Funds Rate three times this year.  Still, they are very data dependent, meaning that they watch every U.S. economic data point from the number of job openings to consumption to many monthly inflation indicators.  In December, right after indicating that they would be cutting rates in 2024, rates plunged from 7.09% to 6.62%, its lowest rate in seven months.  Since then, a series of economic reports suggest that the economy has not entirely cooled enough for the Fed to start its cuts.  

While the latest PCE deflator - the Federal Reserve's preferred inflation measure - reflected a continuing cooling trend in inflation on an annual basis, it also recorded the highest monthly gain since January 2023, a sign that suggests that inflation could remain sticky.  The Fed wants to see more evidence that inflation is slowing consistently and could wait until the second half of the year before making any rate cuts.  As a result, many are expecting rates to move sideways this spring buying season.  The San Diego County housing market is particularly rate-sensitive.  As rates slowly migrate higher, the market cools, limiting supply and demand.  When rates eventually fall, demand will rise, more homeowners are expected to sell, the housing market will speed up and there will be a noticeable increase in closed sales.  

The 2024 housing market is already off to a good start with plenty of cash buyers and educated buyers who have worked their numbers / plan with a lender who are ready to act fast when the right home comes along.  Many Sellers are also becoming buyers as they move up or down depending on their situation adding volume to the county.  

Call me at 858-220-6412 so we can set a meeting to discuss your plans to buy or sell in arguably one of the hottest real estate markets in the country.