Dwindling inventory could push up home prices in San Diego
In light of the city's strong recovery, few experts are surprised by the number of home sales recorded in San Diego in the last few months. As the economy improves, more residents have been drawn to the city, which has increased demand for homes and rental units throughout the region. Subsequently, this demand has sapped the city's inventory of for-sale homes, which some experts expect to contribute to a further rise in the value of real estate in San Diego.
Where have the homes gone?
Between October 2011 and October 2012, the number of homes for sale in San Diego County declined by more than 33 percent, according to Realty Biz News. Furthermore, the San Diego Association of Realtors reports that real estate inventory in the metro area has fallen for 15 consecutive months, and the group predicts that this trend will continue through at least the first quarter of 2013.
Experts attribute this inventory decline to several factors - an improving economy, growing consumer optimism and record-low mortgage rates. Freddie Mac recently reported that the average rate for a 30-year fixed mortgage had fallen to 3.34 percent, the lowest rate in more than 40 years. Combined with growing positivity about the overall economy among consumers, this has helped lure many once-hesitant homebuyers into the market.
Effect on prices
As more people have begun buying homes in San Diego, the prices of these homes has predictably increased. In fact, in September, San Diego county homes rose 4.1 percent from the same month a year ago. A similar price jump was experienced in many metros across the state and country, but San Diego's high rate was especially high. Part of the reason for this may have been the continued decline of distressed properties in the area, according to U-T San Diego.
"We're seeing higher higher median prices because of [the disappearance of distressed properties]," Norm Miller, real estate professor at the University of San Diego's Burnham-Moores Center for Real Estate, told the source. "That's good. We're going to see some modest price appreciation."
As the number of for-sale homes continues to drop in San Diego, Miller believes that prices will continue to rise. He told the source that he expects the next several months to see similar increases in sales and property values. If you are considering buying a home in this desirable city, now may be the best time in the near future.