Home seekers ask why now is the best time to buy a house in San Diego. We will explore the reasons for you.
KEY TAKEAWAYS
- The San Diego housing market expects to cool amongst the most nationwide in 2023
- The Federal Reserve (Fed) keeps raising interest rates to curb inflation.
- Rising interest rates affect mortgage rates which makes home buyers unable to afford their ideal home.
- This pressures home sellers to lower their prices.
- Some experts predict as much as a 27% decrease in San Diego home prices in 2023.
- Yet, San Diego’s economy expects to remain strong in 2023 due to low unemployment and increased military spending in the area.
- Two banks expect San Diego’s economy to remain strong in 2023.
- California expects to experience only a mild economic recession in 2023.
- If San Diego home prices drop by 27%, now is the time to buy a San Diego home.
San Diego Housing Market Expected to Cool the Most in 2023
According to Redfin, “San Diego among housing markets expected to cool the most in 2023”. This prediction is based on a nationwide housing market report released in late December 2022.
The San Diego metropolitan area ranked No. 9 in the national list of markets expected to cool the most. According to the San Diego Union-Tribune, San Diego County experienced home prices dropping for five months in a row as of October.
Redfin based its findings on high inflation and interest rates lowering buyers’ affordability. Also, Redfin predicts continuing rising inflation until late 2023. That’s when the Federal Reserve may feel less pressure to continue increasing interest rates to curb consumer debt which contributes to inflation.
As of December 21, 2022, the interest rate for a 30-year fixed-rate mortgage was 6.28% according to the Mortgage News Daily.
The San Diego metro area experienced fast appreciation in the housing market during the pandemic. The San Diego Union-Tribune reported that during the pandemic, San Diego experienced a 30% annual price increase by March 2022 but went down to a 9.5% increase last September.
On December 14, 2022, KPBS San Diego reported that “Interest rate hikes icing down San Diego’s hot housing market”. Rising interest rates are putting a damper on housing demand in San Diego.
From March to December 14, 2022, the Federal Reserve (Fed) raised interest rates 7 times to fight inflation. This created a big drop in consumer borrowing because monthly mortgage payments were no longer affordable for many home buyers.
Tip: If the demand for San Diego housing goes down, greater opportunities exist for new San Diego home buyers.
How Much Will the San Diego Housing Market Cool in 2023?
According to BubbleInfo.com, “Realtor.com is forecasting that the San Diego-Carlsbad metro area will have prices dropping 27% in 2023”.
On December 12th, The San Diego Union-Tribune also reported Redfin’s predictions of a 27% drop in house prices in 2023. It declared, “San Diego housing market expected to cool a lot in 2023”.
Tip: If San Diego home prices drop by 27%, now is the time to buy a San Diego home.
How Strong Is the San Diego Economy in 2023?
Before buying a house in San Diego, consider what its local economy is doing. A poor local economy means high unemployment, few job opportunities, and lower home appreciation.
Yet, a strong local economy makes buying a home more attractive. If you are moving to the greater San Diego area for better job opportunities and to own a home that appreciates in the future for greater equity, the local economy’s health matters.
“Military spending in San Diego acts as $56 Billion economic driver” according to The San Diego Union-Tribune on December 17. San Diego County’s economy boasts over 360,000 jobs directly or indirectly tied to defense spending. Based on the Military Economic Impact Report for 2022.
The local defense contractors are the biggest employers in San Diego employing over 210,000 people. Even 1,700 local small businesses prosper sharing in 30% of defense spending amounting to $19.2 Billion.
San Diego expects greater defense spending in 2023 with the arrival of more U.S. Navy ships including a third nuclear-powered aircraft carrier. This should amount to an increase of $1 Billion in San Diego’s economy.
On top of military spending, over 230,000 military veterans live in San Diego County (17% of its population). Their spending habits fuels San Diego’s economy.
What do San Diego Banks Predict for 2023?
Fox5 News recently quoted Bank of America CEO Brian Moynihan that San Diego may only experience a “mild recession” in 2023.
Torrey Pines Bank claims in 2023 that “San Diego’s Economy on Solid Footing”.
Milder Economic Recession in California 2023
The Times of San Diego reported in December 2022 that California will not suffer as much if a national recession occurs in 2023.
Also, a recent UCLA Anderson Forecast predicts any national economic recession in 2023 will have a “milder” impact on California.
Got Questions?
Learn About The Housing Market Predictions in 2023
Read our recent articles to learn:
- “How Interest Rates Affect The Housing Market”;
- “What Will Happen With The Real Estate Market In 2023?”;
- “Are We Heading Into A Real Estate Market Crash?”;
- “Should You Sell Your Home Now Or Wait?”; and
- “Should You Buy Rental Properties Now Or Wait?”
2023 is a Good Time to Buy a House in San Diego
Based on the facts presented above, 2023 will be a good time to buy a home in San Diego.
Read these past articles to help you with buying a home:
- “How to Buy a House”;
- “4 Things First-Time Home Buyers Should Do”;
- “What Debt To Income Ratio I Need To Buy a Home”;
- “Best Neighborhoods to Buy a Home for Value”; and
- “Worst Neighborhoods to Buy a Home”.
Why Now Is Best Time To Buy A House In San Diego – Conclusion
After reading our explanation of why now is the best time to buy a house In San Diego, consider these facts:
- San Diego’s housing market expects to be amongst the most cooling in 2023;
- House prices in San Diego may fall up to 27% in 2023;
- Yet, despite national inflation and rising interest rates San Diego’s economy expects to remain strong;
- If a national recession occurs, the State of California is only expected to experience a mild one in 2023; and
- Given the above facts, now is a good time to buy a house in San Diego.
Thinking of Buying a House in San Diego?
Big Block Realty offers you experienced local Realtors who know the San Diego County neighborhoods and housing market. Expect professional advice to help you find your ideal home in the greater San Diego area.
That’s why we’re the Best in San Diego: Big Block Realty recognized in 2022 as the Best Brokerage in San Diego for four straight years (2018 – 2021) by the LocalBest.com site.
Top 50 in the U.S.: Big Block Realty recognized as the 49th Best Independent Real Estate Brokerage in the U.S. in 2022 out of 106,000 real estate brokerages by
The Wall Street Journal partnering with Real Trends Rankings.
Contact us today to learn more about the local housing market and price fluctuations in all San Diego’s neighborhoods in 2023.
Steven Rich, MBA – Guest Blogger
Search Local Real Estate Below Or Use Our: Home Search Tool:
—
HAVE ANY QUESTIONS?
Let us know, we love to help:
Call: (800) 550 – 3209
or Click: www.BigBlockRealty.com/contact
—
Connect with Big Block…
SUBSCRIBE TO OUR CHANNEL: https://www.youtube.com/@bigblockrealty?sub_confirmation=1
CONNECT WITH US ON SOCIAL HERE: https://bigblockrealty.com/social/
Find us on Instagram: https://www.instagram.com/BigBlockRealty_
Steven Rich, MBA has been involved in the real estate industry for over 30 years. As an investor, real estate agent, associate editor of a real estate magazine, a real estate marketing expert, a Wikipedia real estate article author, and as a writer.
