San Diego Real Estate Market in 2019 – WHAT TO EXPECT in the Coming Year
2019 Housing out look for San Diego County
Are we headed for a correction? Are we in a bubble? Should I sell now? The answers are yes, no and maybe. 2018 – this last year was an overall solid year for the real estate market in San Diego, but the first ½ of the year couldn’t have looked and felt more different than the second ½ of the year. Up to July, appreciation and overall sales were brisk, inventory was low and the market was white hot.
As the year progressed, appreciation and increases in interest rates took a toll on the affordability of the market for home buyers. This, coupled with a substantial rise in the amount of new listings created a damper on the market in general. We predicted at the onset of the year an overall marketing appreciation of 6% overall, and San Diego County has appreciated right in line with what our projections which was pleasing for us to see as well as for homeowners throughout the county. That being said, the year ended with a housing supply that’s about 50% larger than a year prior, affordability at a 10 year low, an increasing interest rate environment upon us, and a fiscal, economic and political climate that is at best, uncertain. Ultimately, 2019 is poised to be a year in transition.
Are we headed for a correction? Are we in a bubble? Should I sell now? The answers are yes, no, and maybe.
The fundamentals of the San Diego Economy are solid. Unemployment is low, and we can’t build enough new homes to satiate the population growth and housing needs in the market today. Affordability will continue to be an issue, but the market will hold its own for the year creating an ideal environment for move up or move down buyers/sellers.
The metrics entail that a buyer in 2019 will have more choice and less competition than years prior. Sellers will have longer marketing times to sell any given home, and the market will be more balanced between buyers and sellers overall. Although inventory is higher, San Diego is still a market with a relatively constrained supply, so although we are not projecting a downturn in the market, we do expect the year to be largely flat-to-slightly positive.
As a result, in 2019 we expect slight to moderate price appreciation for the foreseeable future in the short and medium-term. We are in a market correction, but it may not be the type of correction many consumers are expecting. If you’re expecting a 15%+ correction in values, its not happening. As such, we are not in a bubble. The fundamentals are solid, and in any market experiencing a bubble, the fundamentals are thrown out the window. Should you sell? That comes down to you. Where would you move to? It would be advantageous to lock in massive price gains over the past many years in San Diego and either move or invest in other areas that have not quite appreciated in lockstep and are poised to (think places like Utah, Colorado, North Carolina)
If you or someone you know is considering making a move or investing in real estate in San Diego we would love to serve and delighted to earn your referral. Here’s to a great year in 2019!