The Core Login Index shows that the average house price in San Diego has risen by approximately 25 percent so far in 2021, which is the second-fastest rate in the country. Demand and mortgage interest rates will have an effect on the Southern California home market, so we may expect fluctuations in those numbers in the following months.
For now, let’s take a look as to what the remaining of 2021 and the entire year of 2022 have in store for purchasers, sellers, or real estate investors.
A reduction in home inventory, as predicted in the May 2021 Real Estate Prices Report, did not occur this spring. Rather than going down, the inventory figures rose. Inventory levels may begin to climb again in the second quarter of 2021 and extend into 2022, some experts have speculated Buyers may find some respite from rising prices, but this will be contingent on the state of the local markets.
American homes’ yearly value growth in April 2021 is 11.6%, the largest increase since 2005. That was not the case in my case. In San Diego, the annual growth rate was 16.5%. In addition, nearly half of the properties for sale in the neighbourhood are selling above their asking price. When compared to the national average of 29 percent, this is very astounding. The San Francisco market isn’t standing still.
As of this writing, some claim San Diego housing prices are nearing their all-time highs. The opposing argument is based on the fact that there is a gap in affordability. A time of pricing stability may be necessary if customers are unable to afford the rising prices. The foreclosure moratorium is a noteworthy milestone. Before the state of California’s foreclosures moratorium went into place, there were a number of homeowners in a precarious financial situation. However, the same people may still be in danger of losing their houses because they were unable to better their financial status over time. The issue here is that when the moratorium on foreclosures expires, people will be compelled to sell their homes in order to pay their lenders. At some point between now and the end of 2022 or beginning of 2023, prices may drop.
If current housing patterns continue into early 2022, everyone should keep an eye on what’s going on right now. Until May 2022, CoreLogic HPI expects home prices to rise by 11%, echoing the previous forecast. It’s not just the lack of homes on the market that’s driving up the price of a home purchase, though. Time can tell if there is an increase in the number of new dwelling units being constructed.
This is something to keep an eye on. In San Diego, the cost of living is expensive, but housing in California is a nightmare. Anyone from Orange County considering relocating to San Diego because of the low cost of housing may be tempted. Once upon a time, those who wanted to live in San Diego but work in Los Angeles were put off by the drive. The shift to remote work has altered this. Employers with offices in Los Angeles can now hire employees who will commute to and reside in San Diego. Working from home might have an impact on the value of real estate in this location
What’s Going On With Interest Rates On Mortgages?
Anyone interested in seeing what horrendous interest rates are now in the spring and early summer of 1980 can do so. Mortgage interest rates of 12 percent or more were not uncommon, and this is not hyperbole.
There have been no major changes in the market, although recently, interest rates have gone higher. Although San Diego’s mortgage rates are slightly higher than the rest of California, the buyer’s advantage outweighs that. Rates are expected to remain low for the foreseeable future compared to 2020, making it easier for homebuyers. The key concern is whether mortgage rates will continue to be low in the future.
An increase in interest rates is predicted by the Mortgage Bankers Association. This year, mortgage interest rates are expected to rise to 3.2 percent, and in 2022, they are expected to rise to 3.6 percent. The final mortgage rate is.0054 percent higher than that of the above-mentioned 30 Year Adjustable Mortgage interest rate (3.06 percent ). It doesn’t seem like much, but when you add it all up, it adds up quickly.
Given that a $700,000 San Diego property costs.0054 percent more now than it did previously, the buyer should expect to spend an extra $3,780 per year in total interest of their loan if they purchase that property. In sunny California, you can bet the house that rates would be higher than the national averages, according to MBA statistics. If borrowing rates rise, it’s hoped that sellers will reduce the price of the homes they have on market.