Low inventory continues to be the story as the San Diego real estate market heads into the holidays. It is typical for the market to slow down at this time of year and all indications are that we will continue this trend.
Demand however is still strong fueled by low mortgage interest rates and a shift in priorities due to the changes in the employment sector. With many buyers being able to work from home, they are searching for more bedrooms, home offices, space for a home gym, and room for kids to play. This trend has placed a premium on detached single family homes which have seen the Average Sale Price increase 23% over the last year versus only 18% for condos and townhomes. Home builders have had a rough year with supply chain disruptions and challenges with labor, so it is unclear if they will be able to help with the inventory shortage in the near future.
Home sellers who do not need to buy a replacement home are best positioned in this market, and many people are selling their rental properties trying to cash out at the peak. Sellers who need to buy a replacement home have tough challenges in multiple offer scenarios if their purchase must be contingent upon the sale of their home. Home buyers are still likely going to encounter bidding wars and fierce competition from aggressive buyers, especially for detached single family homes.