San Diego County Housing Report, Unexpected Slump in Demand - May 5, 2022
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Higher 30-year mortgage rates are having a major impact on San Diego County demand, now at levels far below typical spring averages.
Demand Slumping - Over the last year, buyer demand
In 2002, the Los Angeles Angels won the World Series for the first time in franchise history. The next year they missed the playoffs completely with a losing record. After hoisting the Commissioner’s Trophy the year before as champions of the world, they missed post season play due to a slump in wins to close out the year from July through September. The San Diego County housing market is amid a similar slump in the middle of the Spring Market following the best year for local real estate since 2005. Search for homes
According to Mortgage News Daily, 30-year mortgage rates have risen from 3.27% on December 31st to 5.55% today, a climb of more than 2.25%. Rapidly rising rates eat into affordability significantly. For example, the monthly mortgage payment for a $1.1 million purchase with 10% down has risen from $4,319 on December 31st, when rates were at 3.27%, to $5,652 per month today at 5.55%. That is a $1,333 per month rise, or nearly $16,000 per year. The significant change occurred in just four short months. Click here to get the complete report with graphs
California Association of REALTORS® reported that the median detached home in San Diego County rose to $950,000 in March, up 19% in contrast to last year’s $800,000 median. At these levels, rising mortgage rates significantly impact payments.
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In response rising rates, demand has slowed considerably. Demand, the prior 30-days of pending sale activity, has been on the decline after peaking on March 17th, shedding 5%, or 131 pending sales, since. Usually demand peaks from the end of April to the end of May. This year, with rapidly rising rates, many buyers backed off purchasing, the peak occurred early, and not everything is selling instantly.
Today’s demand readings are muted compared to last year, 2,654 versus 3,413. That is down 22%, or 759 pending sales. Keep in mind that last year was the best year for San Diego County housing since 2005. Yet, the 3-year average for demand prior to COVID (2017 to 2019) was 3,546. Today’s demand is down 25%, or 892 pending sales, compared to the average.
GET A CASH OFFER ON YOUR HOME
CALL GEORGE LORIMER @ 619-846-1244 and Start Packing!
Higher 30-year mortgage rates are having a major impact on San Diego County demand, now at levels far below typical spring averages.
Demand Slumping - Over the last year, buyer demand
In 2002, the Los Angeles Angels won the World Series for the first time in franchise history. The next year they missed the playoffs completely with a losing record. After hoisting the Commissioner’s Trophy the year before as champions of the world, they missed post season play due to a slump in wins to close out the year from July through September. The San Diego County housing market is amid a similar slump in the middle of the Spring Market following the best year for local real estate since 2005. Search for homes
According to Mortgage News Daily, 30-year mortgage rates have risen from 3.27% on December 31st to 5.55% today, a climb of more than 2.25%. Rapidly rising rates eat into affordability significantly. For example, the monthly mortgage payment for a $1.1 million purchase with 10% down has risen from $4,319 on December 31st, when rates were at 3.27%, to $5,652 per month today at 5.55%. That is a $1,333 per month rise, or nearly $16,000 per year. The significant change occurred in just four short months. Click here to get the complete report with graphs
What's your home value?
In response rising rates, demand has slowed considerably. Demand, the prior 30-days of pending sale activity, has been on the decline after peaking on March 17th, shedding 5%, or 131 pending sales, since. Usually demand peaks from the end of April to the end of May. This year, with rapidly rising rates, many buyers backed off purchasing, the peak occurred early, and not everything is selling instantly.
Today’s demand readings are muted compared to last year, 2,654 versus 3,413. That is down 22%, or 759 pending sales. Keep in mind that last year was the best year for San Diego County housing since 2005. Yet, the 3-year average for demand prior to COVID (2017 to 2019) was 3,546. Today’s demand is down 25%, or 892 pending sales, compared to the average.
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