San Diego October 2022 Market Update

I am so excited to share this month’s market update because I have a ton of data for you. Let’s start with the interest rates as of today.

This graph shows the interest rates from the mid-1970s to today. You can see that we are nowhere close to where we were when I first started selling real estate. But notice the late 70’s. This is where I see the stagflation.

Now, look at the interest rates for this year. It is very similar to the graph trends in the late 70’s.

The next graph that I have for you is the volume of existing home sales.

This is from 1976 to ’96, but what I really want you to see is during the recession, we had a volume of almost $4 million homes sold and we went down to a low in 1982 of about $2 million homes sold. Contrast that for where we’re headed today, the volume this time last year from January 1st, 2021 till October 1st, 2021, there were 30,600 homes sold here in San Diego County. This year from January 1st to October 1st, we were at 23,300 homes. So we’re down by about a third. So I wanted you to see that, just so you get the idea of what really changed was the volume of homes being sold.

Because then comes the next most important part, which is of course what was actually going on with pricing.

So when you look at actually what happened during pricing, pricing didn’t drop. So I’ve heard so many people say to me, hey, I’m going to sit on the sidelines until prices change. But what you need to know is that prices didn’t really change during that period of stagflation. This time period is not like what we saw in 2010. This point where we’re seeing the interest rates go up and we’re seeing energy prices up that I’m calling stagflation. I’m trying to let you understand, prices didn’t really drop, people just got squeezed. So what does that mean for you and I? Well, what that means for you and I is that home prices now you get to see, this is the graph of San Diego County for this year.

The blue is the median list price when homes came on the market and the red is the median sale price. And so you’ll notice that we started below $750,000, and here we are today in October and we’re still over $800,000. So that’s what I really want you to see on that. And even the volume of listings. It was interesting. We started this year at a volume of 1,350 homes on the market. So very few. Just for everyone how there were 10 buyers it felt like. We went to a high last month of 4,800 listings and now we’re down to 4,070. So we’ve actually seen the decline in the number of listings, and as we go into this fourth quarter, as we finish it out, I can tell you that now is the time. If you know a first time buyer, a move up buyer, or an investment buyer, this is the time they’ve been waiting for.

People ask me all the time, when’s the right time to buy? And I’m telling you, it’s fourth quarter when no one else wants to buy. Just to give you some more food for thought on how that actually works. I’ve got my last great quote for you to give you courage on that. If you feel like you need it.

It’s from Warren Buffet and it says:

“Most people get interested in stocks,” or I’m going to generalize and say equities when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”

I really want you to take that to heart. The time that you’re going to look back and go, wow, I made a great deal on a property is when you’re buying and no one else is. That’s now. People that are on the market right now, they want to sell. Even if they’re priced too high, a lot of them are willing to do deals and now’s the time. Look forward to talking to you. Call me with any questions. Take care.