The summer of 2023 has been characterized by a low inventory, homeowners unwilling to sell, low demand and a low number of closed sales. The higher mortgage rate environment impacted many real estate statistics and resulted in a very cool summer. The active inventory, demand and closed sales pale compared to when housing felt "normal" before COVID. Many would intuitively think that the most significant impact would be demand, yet the supply of available homes to purchase has suffered the most substantial blow.
The inventory started in January 45% below the 3-year average before COVID (2017-2019). The difference grew as the year progressed and the supply failed to rise as much at all. Today it is 64% lower than that average, sitting at 2,549 homes compared to 7,083 when SD County felt normal. Today's level is the lowest inventory for a start to August since tracking began in 2012. The low supply in 2021 led to a historic low start to 2022. Similarly, if trends do not change for the remainder of the year, 2024 may break that record.
Many wonder when more homeowners will sell and when will active listing inventory rise. The answer is lower mortgage rates. More homeowners would opt to sell if rates were below 6%. Demand would rise and so would the number of closed sales but it is going to take awhile to see the inventory increase. As rates drop and demand rises, newly listed homes would sell quickly, making it challenging for the supply to rise. The good news will be that the recession in units will fade as more buyers and sellers tap into the housing market. As for now, homes that are appropriately priced and show well, continue to receive multiple offers and often sell for more than list price. The above statement is true for most homes priced $4M and under but the key to seller's success is pricing the home at or just below market.
As the job market continues to show signs of easing, it is looking more likely that the Fed may not raise rates in their upcoming September meeting. Mortgage applications just started rising after five weeks of retreat, and the housing market could build on its momentum if rates continue to move sideways or even decline in the next few weeks.
Whether you are looking to sell or purchase a new home..... call me at 858-220-6412 to schedule a meeting so we can discuss your goals, timing and current market conditions to succeed in this competitive market.
The inventory started in January 45% below the 3-year average before COVID (2017-2019). The difference grew as the year progressed and the supply failed to rise as much at all. Today it is 64% lower than that average, sitting at 2,549 homes compared to 7,083 when SD County felt normal. Today's level is the lowest inventory for a start to August since tracking began in 2012. The low supply in 2021 led to a historic low start to 2022. Similarly, if trends do not change for the remainder of the year, 2024 may break that record.
Many wonder when more homeowners will sell and when will active listing inventory rise. The answer is lower mortgage rates. More homeowners would opt to sell if rates were below 6%. Demand would rise and so would the number of closed sales but it is going to take awhile to see the inventory increase. As rates drop and demand rises, newly listed homes would sell quickly, making it challenging for the supply to rise. The good news will be that the recession in units will fade as more buyers and sellers tap into the housing market. As for now, homes that are appropriately priced and show well, continue to receive multiple offers and often sell for more than list price. The above statement is true for most homes priced $4M and under but the key to seller's success is pricing the home at or just below market.
As the job market continues to show signs of easing, it is looking more likely that the Fed may not raise rates in their upcoming September meeting. Mortgage applications just started rising after five weeks of retreat, and the housing market could build on its momentum if rates continue to move sideways or even decline in the next few weeks.
Whether you are looking to sell or purchase a new home..... call me at 858-220-6412 to schedule a meeting so we can discuss your goals, timing and current market conditions to succeed in this competitive market.
Ben Anderson
License DRE# 01369906
Broker DRE# 01767484
1111 Prospect Street, Suite 100, La Jolla, California 92037
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1111 Prospect Street, Suite 100, La Jolla, California 92037
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