Welcome to San Diego Blog | April 24, 2020
San Diego Real Estate Update
It’s been an interesting past month to say the least. We were headed into the best Spring season we have had in real estate since 2005. What I mean by that is that we had more properties under contract, more buyers and more listings taken than we had had in the past decade. Well, that all came to a screeching halt and while you may have your own ideas about what is to happen next, the information below is from an economist, Steven Thomas, that we subscribe to that has been tracking everything. While you may agree or disagree, this is what his research is showing:
Message TO BUYERS:
There is very little price movement within the overall San Diego County housing market. My message to buyers is: do not expect a deal!!
From the real estate trenches, some prospective buyers are expecting values to drop 10%, 20% or even 30% like they did during the Great Recession. The current Expected Market Time for San Diego County is 88 days, a slight Seller’s Market, a market where sellers get to call more of the shots, and values are not changing much at all. Within the next couple of weeks, it will become a Balanced market, one that does not favor any buyers or sellers, and values are not changing much at all. During the Great Recession, the Expected Market Time climbed to nearly 400-days for all of San Diego County. Only at those levels will values drop substantially.
Message TO SELLERS:
Until the shelter in place order is lifted expect meager buyer activity, showings, and offers. Even with real estate being reclassified as an essential service, it really has not moved the needle in terms of demand. Expect demand to remain at its current, inherent levels and the active inventory to continue to slightly grow, ultimately sowing the market further until the economy is unlocked.
Across the board, the broad housing market has been interrupted and the disruption will continue. Even when the governor opens economic activity, it will not be a light switch flipped to “on” instead, it will be more like a dimmer. Demand will slowly thaw as more homeowners opt to place their homes on the market. It will be a slow, gradual evolution and there will not be a sudden spike in either supply or demand.
At Dannecker & Associates, the last 4 weeks, we’ve put one property under contract each week including one just today. Normally, we would put 4-8 properties under contract per week this time of year. While we are grateful that we are able to help some clients, it’s certainly been disappointing to not be able to have a successful outcome for all of our clients. We have been working diligently to create online videos, 3D virtual tours, and get floorplans created for all of our listings.
With the opening of San Diego City parks this week, we are optimistic that everything starts to open back up as we move into the late Spring and Summer months. I for one am ready to turn the dimmer up immediately. Stay safe, stay sane, stay positive, test negative. Cheers- Chad