SAN DIEGO — San Diego has a very low inventory of available homes for sale, so it’s no surprise that it’s a seller’s market right now, but with sky high inflation and rising interest rates, how is all this affecting homebuyers?
“For buyers who want to buy in the next 12 months, frankly, the promise that interest rates are going to be continually going up is making them get off the fence and buy now,” said realtor Matt Battiata.
According to Zillow, the national average for a 30-year fixed mortgage rate is hovering around 3.67% as of March 6, 2022.
With interest rate hikes on the horizon from the Federal Reserve, some buyers are motivated to make their purchases sooner than later.
“We know interest rates are going to keep going up to stem inflation, and that is also giving buyers a bit of impetus to jump now,” said Battiata, whose been a realtor in San Diego for 22 years. “For buyers who want to live here in San Diego, I think they’re still pretty motivated.”
San Diego’s great weather attracts homebuyers from all over the country, especially for people who are able to work remotely and want to relocate here. This trend places even more strain on an already low inventory.
“We are still getting quite a few people moving here from San Francisco, Bay Area, Seattle, Portland, the whole West coast, even Los Angeles and Orange County,” said Battiata. “And because the inventory is so low, we don’t need that many of them coming in, honestly, because there’s just not that many homes going on the market.”
While prices seem high to us here in San Diego, they may seem like a bargain to someone from San Francisco. Battiata has plenty of clients moving down from the Bay Area.
“I was showing somebody a $7 million dollar house the other day, and their 14 year old son said, ‘Gosh it’s amazing how much you get for the money down here.’ So it’s all relative. Compared to the Bay Area and compared to L.A., it’s still cheap here in San Diego.”
In recent weeks, Battiata has noticed the market temper down just a little bit on the buying side for a number of reasons.
“It’s not quite as crazy of a market as it was,” said Battiata. “We’re still able to generate multiple offers on pretty much all of our listings, but it has been tempered a little bit. That’s a combination of interest rates, the stock market going down, what’s happening in Ukraine, you know, just the global economy, inflation, so there has been a little bit of a sea change but it’s all relative. It’s still a seller’s market.”
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