Inventory (homes for sale):
Did you know there are 2,398 homes in Del Sur, San Diego? There are 1,704 detached homes (single-family) and 694 attached (townhomes/twin homes) homes in Del Sur. At the time of writing, there are only 4 attached 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, with 49% fewer homes for sale between January - April 2023.
Why?
Interest rate hikes have crashed the party! In order to fight inflation, the Federal Reserve began raising interest rates in May 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.
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 the vast majority (89%) have an interest rate of 5% or less! 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.
Good news?
The Feds just raised the rates by .25%, however, lenders were anticipating this news, so they have already baked these increases into their pricing. Local economists are predicting that rates will stop rising for the rest of the year. Wahoo! They are expecting that when rates drop to 5.5%, inventory will increase, peaking sometime between July - August 2023.
Attached Home Values in Del Sur
How have these rate hikes and inventory issues affected attached home values? Before rate hikes, the average price per square foot of sold attached homes was $682 between Jan - May 2022. After rate hikes, the average price per square foot decreased to $604, or down by 11%, between June - Dec 2022. There were only 18 townhomes sold during 2022 in Del Sur along with 4 twinhomes that I am not including in this analysis as they are a unique product. In total 22 attached home sales in 2022.
Avante, Del Sur’s 55+ townhome community, sold the most, with 7 out of 22 sales (34%) during 2022. Fun Fact: Our team sold 4 of these Avante 55+ homes last year! The remaining breakdown included: 2 Garretsons, 5 Mandolins, 4 Skye, and 4 Casseros (twin homes).
San Diego is in the top 20% nationally for real estate appreciation. NeighborhoodScout.com's data also shows that in the past ten years, San Diego real estate appreciated by 124.96%. This amounts to an annual real estate appreciation of 8.45%.
During the first 4 months of 2023, only 2 non-age restricted attached homes sold in Del Sur, with an average price per square foot of $565. The other 3 sales were in Auberge and Avante, both 55+ communities, which clocked in at a much higher average of $705/Square foot. With only 5 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!
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
