House prices in San Diego are skyrocketing and many are wondering when prices will peak.
June, median county home prices Rise to record $ 750,000, Increased from the previous record of $ 725,000 set in May. The latest record is nearly 25% higher than the median of the previous year at $ 600,500.
Record activities include limited supply, low mortgage rates, and thousands of dollars above the required price (sometimes 45,000 above the demand) to secure properties in demand by buyers. It seems to be the product of being willing to pay).
Q. Are house prices in San Diego approaching their peak?
Phil Blair, Manpower
Yes: We are approaching the keyword. As long as interest rates are low and homeowners are concerned about protracted COVID issues, I think normal home sales will remain slow. Every time the price soars, more buyers are forced to drop out of the market. I think house prices will level off, but we can’t expect a significant drop.
Gary London, London Moeder Advisors
Yes: While supply shortages and high demand continue to raise prices, the affordable gap for many is widening and the situation is unsustainable. In addition, tolerance, rental assistance and moratorium programs are nearing the end. I think the best we can expect is price peaks and subsequent price stability. If inflation and interest rates continue to rise, prices can fall somewhat. However, our region is in a better position to withstand the downtrend than other regions as the regional economy remains strong.
University of San Diego Arangin
No: Economic growth is strong and may be strong as the business resumes. It will lead to a steady increase in income, which will continue to boost the housing market. By reducing the cost of traveling and eating out, those who continued to work were able to save enough money for a down payment (“COVID Piggy Bank”). In addition, San Diego has the usual supply problems. Geography and policy limit the amount of construction that can occur.
Bob Roach, RA Rauch & Associates
I haven’t participated this week.
Austin Neudecker, Weaving Growth
No: In the short term, the supply-demand balance is still moving in the wrong direction, and prices may continue to rise. The market can normalize over time, but in the long run San Diego will continue to be a very attractive place to live. Nearly perfect climate, myriad activities, and growing cultural institutions make it difficult to beat our hometown, as long as we continue to attract and create innovative companies that create high-paying jobs!
James Hamilton, University of California, San Diego
No: The Federal Reserve Board has been moving towards keeping interest rates below inflation for some time. This is a reminder to hold money in bonds and stocks, making real estate one of the most attractive investments currently available. House prices can’t last forever, but it’s too early to peak. Do not sell your home on the first offer as higher ones may come.
Chris Van Goder, Scripps Health
No: Prices are unlikely to peak for the foreseeable future unless there is a significant economic downturn that weakens demand. House prices and sales spikes can be impacted by rising interest rates, but it will take a long time for supply to catch up with demand. Too many people are trying to buy. And homeowners are hesitant to sell, fearing that they could be priced by buying another home in the area.
University of San Diego Norm Miller
No: Due to low prices, low inventories and modest new construction, there are runways where prices rise. Sellers are afraid that they will not be able to find a new home once they sell. Keep in mind that it is not so much income that drives the second and third home prices, but the stock gained in the previous home and the vibrant stock market involved in the next purchase. The challenge for new homebuyers is getting in the carousel.
Jamie Moraga, IntelliSolutions
No: Currently, inventory is declining and demand is high, exceeding the bid war and thousands of asking prices. Coupled with low interest rates and desirable locations, San Diego continues to have a hot housing market. Pandemics are also driving the market independently as homebuyers spend more time at home and want more space. House prices in San Diego should continue to rise until 2022 until demand declines and interest rates rise.
David Ely, San Diego State University
No: Housing demand has outpaced the construction of new homes for many years. The dramatic expansion of housing supply needed to resolve imbalances seems unlikely in the foreseeable future. Low mortgage rates over the next few years will continue to stimulate home purchases. House prices in San Diego can rise slowly as more residents are priced from the market, but market imbalances will continue to raise home prices for some time.
Ray Major, SANDAG
I haven’t participated this week.
Reginald Jones, Jacobs Center for Neighborhood Innovation
Yes: House prices will level off. But it’s not fast. Historically, low interest rates have increased buyers’ purchasing capacity. Limited inventory is best for sellers. This trend may exist until 2022. Be aware of the looming economic factors. Some people predict that mortgage rate hikes will be faster than slower. Lifting the moratorium of foreclosures that result in extended inventory can also shock the market. Anyway, San Diego has an affordable issue that limits too many working families from home ownership.
Linlyzer, Point Loma Nazarene University
No: Low mortgage rates, increased employment and increased income continue to support housing demand. Regional resistance, regulatory constraints, and construction costs continue to constrain supply. The city of San Diego produces less than half the number of units needed to meet the state’s mandated goals by 2029. Price increases can slow as more households are priced from the market, but without the recession, the peak isn’t closed.
Kelly Cunningham, San Diego Institute for Economic Research
Yes: Prices peak, but San Diego isn’t there yet. The median home price ratio in San Diego is currently 7.0 times the median household income. This ratio previously peaked at 8.0 in the fourth quarter of 2005 and collapsed to 3.6 by the first quarter of 2009. The Los Angeles home price ratio is currently 10.1 times the median income, but Orange County has already shrunk from its recent peak of 8.3 to 7.9.
Any ideas for EconoMeter questions? Email me at jennifer.vangrove@sduniontribune.com.
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