SAN DIEGO — Rising interest rates have caused a sharp turnaround in the housing market. Home sales have fallen for six months, according to the National Association of Realtors.
And even with a housing shortage, experts say that San Diego’s housing market is certainly cooling off.
"In San Diego, the inventory is such that the growth rate of the population far exceeds how many houses we’re building," said Frank Powell, president elect for the San Diego association of realtors.
Powell says despite how small of an inventory there is, right now some houses are not moving.
"We’re starting to see the houses down the market for 25-30 days right on average right now, if you would consider a few months even a month ago you’d have multiple offers on day one," said Powell.
Powell says with the interest rate hike – and the price of everything else being so high, buyers are reluctant to pull the trigger and put a bid on a home.
"We’ve been telling people that the interest rates will go up, but we don’t know by how much and until it finally happens people usually don’t make a move," said Powell.
He says people have been skeptical.
Mortgage rates have jumped since the beginning of this year, but it was somewhat steady in recent months.
"Well, it’s doubled so people weren't expected that completely slowed down the market," said Powell.
And the pressure is on for home sellers, trying to cash-in before interest rates go even higher.
Holly Hogrefe has been in her house since 1994, she’s now moving to North Carolina. She was told to quickly put the home on the market.
"When I heard about interest rates going up and up it became very urgent," said Hogrefe.
Her home was listed for a week before offers came in. She bought it for $300,000 and she’s selling it for close to $2 million.
"I decided to sell hopefully to a family who can raise kids and love it as much as I did," said Hogrefe.
She says she feels fortunate and with few homes available in San Diego, she felt this was the right decision.
"I put my heart and soul into this house, and I heard all these horror stories about renting you know and squatters people destroying property. So, I didn’t feel comfortable renting," said Hogrefe
In San Diego, the average home price is $850,000 and the average salary in San Diego is around $70,000.
Powell says the best thing to do if you want to buy a home is plan ahead and make a 5-to-10-year plan for yourself.
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