Inventory (homes for sale):
Did you know there are 2,398 homes in Del Sur? We have 1,704 detached homes (single-family) and 694 attached (townhomes/twin homes) homes. At the time of writing, there are only 4 homes for sale - only 1.5% of all homes in Del Sur! In the past 12 months, 40% fewer homes have sold in Del Sur than in the previous 12 months. Active inventory has steadily decreased since last summer, and now we are at new inventory lows.
Why?
Interest rate hikes have crashed the party! In order to fight inflation, the Federal Reserve started raising interest rates in May of 2022. This affected the economy overall, and the housing market directly by making new mortgages more expensive, which in turn slowed buyer demand and seller activity. There have also been a handful of bank collapses in 2023 that may be increasing anxiety levels of buyers and sellers alike, although it’s too early to tell if this will have a substantive effect or not.
Deja Vu?
We get this question a lot: “Is this a repeat of the housing crash from 2008?”. There are fundamental differences between what’s driving the housing market today compared to 2008. Back then, anyone with or without a heartbeat qualified for a mortgage. Nowadays, it’s much harder to qualify. This can be a double-edged sword. There are fewer people qualifying for mortgages, but the mortgages that do originate are of a higher quality. Today, it’s not about people who can’t afford their mortgages, it’s all about rates and lending standards.
Econ 101:
Higher interest rates are dampening both supply and demand. As rates increased from 3% to 7% in 2022, homes sat on the market longer, while sellers became discouraged from selling. Owners today generally have a lot of equity and a low interest rate mortgage. The thought of “moving up” is hard when it means your payment will increase so significantly! As a result, here in Del Sur, sellers tend to feel stuck. As the inventory has further eroded this spring, the buyer demand is increasing. Less product means more competition for buyers.
Detached Home Values in Del Sur
How have these rate hikes and inventory issues affected detached home values?
Between Jan - May 2022, the average price per square foot of sold detached homes was $744. Between June - Dec 2022, the average price per square foot decreased to $703.
Good news! This 5.6% decrease is less than the general detached home decrease in San Diego County (7.5%) during the same period.
During the first quarter of 2023, there were only 2 non-age restricted detached homes that sold in Del Sur, with an average price per square foot of $620. The other 2 sales were in Auberge at Del Sur, a 55+ community, which clocked in at a much higher average of $864/Square foot. With only 4 comps total, it’s hard to make any statements, analysis or predictions about 2023, except to say that there are few homes for sale! Please call us to sell your home!
Other 2022 Detached Stats:
The 3 clusters are broken out by “Old”, “Mid”, and “New” Del Sur based on year built.
Our Take:
In general, the lower the square footage, the higher the price per square foot, which is what we see play out across all segments. The 4 bedroom price per square foot is consistent across all segments. In 2022, homes built between 2013-2014 with 4-6 bedrooms commanded the highest price per square foot. What do these numbers say to you?
What does this all mean for you?
We are starting to see packed open houses, multiple offers, and bids over asking again due to the extremely low inventory, even despite the higher rates. Yes, it’s true! If a home is priced accurately, we are seeing the bidding wars again! Buyers, who now have to pay more for a home and mortgage, are very picky about the condition of the home. They have little to no appetite to buy a home that will immediately need remodeling. We have an actual case study in Santaluz proving this point in real terms if you want to check it out.
We both live in Del Sur and are supported by a team that includes designers, contractors, and marketing professionals. We are 92127 experts who know what to do to help homes sell quickly and at record prices. If you are interested in learning more, please reach out directly to us!
Heather Wendlandt & Michelle Kolker
619.566.8106
teamkolker@compass.com
