San Diego County’s median home price fell for a fourth month in September, down 6 percent from its peak in the spring.
The median was $795,000, CoreLogic said on Tuesday. It hit an all-time high of $850,000 in May, but the market — in San Diego and the rest of the nation — has slowed as mortgage rates continue to rise. The median combines all sales of single-family homes, condos, and townhomes.
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Prices are still rising 7.4 percent annually in San Diego County, one of the biggest gains in all of Southern California. However, rising mortgage rates are affecting potential home buyers, and sellers are waking up to the reality that prices need to be lowered in many cases.
Higher mortgage rates mean larger monthly payments, making the income required to qualify even greater. For example, the monthly cost for a median-priced resale home at $600,000 — assuming 20 percent down — would be about $3,195, up from $2,281 a year earlier.
Mauricio Perez-Vazquez, an agent with Twenty Four Seven Realty, said many of his clients have seen their dreams of home ownership dashed in recent months.
“I see a lot of first-time buyers who can no longer qualify,” he said.
Perez-Vazquez said some sellers understand the market is down, but that’s OK because home prices have appreciated so much in recent years that they don’t feel bad about selling now. However, he said some sellers have a hard time accepting that their home isn’t worth as much as it was a few months ago.
The average days on the market to sell a San Diego County home was 28 days in September, the Redfin Data Center said. That’s more than nine days at the beginning of the year. Also, Redfin said 45.7 percent of homes listed for sale had a price drop. That’s up from 12 percent in January.
Most analysts, and real estate agents, say rising mortgage rates are the biggest factor in the market slowdown. The interest rate for a 30-year, fixed mortgage was 6.11 percent in September, Freddie Mac said, up from 2.9 percent a year earlier.
Perez-Vazquez said some buyers are taking advantage of buying down interest rates. Lenders often allow buyers to pay up front to get a lower rate by purchasing points. When you buy points, you immediately get a lower interest rate.
This means a lower monthly mortgage payment and over the life of the mortgage can save money in the long run – however, buying the interest rate can be expensive and difficult to pencil in if a buyer is already financially stressed. A mortgage point usually costs 1 percent of the total mortgage amount.
Goldman Sachs Research predicts that US home prices will fall 5 to 10 percent from their peak by the end of the year.
“Our economists think it is unlikely that there will be a large wave of foreclosures in the United States,” the Goldman Sachs report read, “because a recession would likely be mild, the housing market is tight, mortgage quality is solid and a large proportion of the mortgages has a fixed exchange rate.”
Most analysts do not predict a major home price crash because the number of available homes is much lower than during the Great Recession – which saw a major construction boom before the crash. There are also stricter requirements for loans.
Here’s how San Diego County prices changed by home type in September:
With homes sitting on the market longer, it means more options for buyers – even if it’s more expensive with rising mortgage rates. There were about 5,100 homes for sale in September, Redfin said, up from just over 2,000 to start the year.
Almost all of Southern California saw price drops from August to September. Orange County fell the most, 3.5 percent, to a median of $950,250.
It was followed by Los Angeles County, dropping 2.3 percent to $806,000; Ventura County down 2.2 percent to a median of $762,500; Riverside County, down 0.9 percent to $565,000; and San Diego County with its 0.6 percent drop. San Bernardino County was the exception — increasing 1.8 percent to $504,000.
“By the end of 2023, financial market participants expect the Fed to increase the Fed funds rate target by 175 to 200 basis points from current levels. That would translate into 30-year and 15-year mortgage rates at approximately 8.50 and 7.70 percent, he says.
Should I sell my house now?
With a continued supply shortage and high buyer demand, now is a good time to sell your home. And with interest rates rising, it may be better to sell sooner rather than later — if rates rise much more, some prospective buyers may back away from home shopping. But think carefully about your reasons for selling.
Should I sell my house now before recession? Reasons to Sell a Home Before a Recession If you want to get the highest price for your home, aim to sell the home in a time of economic exuberance. On the other hand, during a recession consumers become defensive and are not as willing to pay as much for anything including a home like yours.
Is it better to sell now or wait?
Your local market is now favoring buyers. A home in a buyer’s market could take 2-3 months or longer to sell, compared to just a few weeks in a seller’s market. If you don’t have a pressing need to sell your home, it might be worth waiting until the market changes in your favor before listing your house for sale.
What month is the best time to sell?
Sellers can net thousands of dollars more if they sell during the peak months of May, June and July versus the two slowest months of the year, October and December, according to a 2022 report from ATTOM Data Solutions.
Should I sell now or wait 2023?
Now is a great time for you to sell your house! Especially since rates are expected to continue to rise throughout 2023. This means that some buyers will be pushed out of the market by high interest rates, forcing home sellers to drop their prices.
Should you sell your house in 2022?
2022 is still a seller’s market if you’re looking to profit – but it’s important to note that the market is not as competitive as it was in 2021. You may have heard stories of sellers being able to find buyers to take their home. such, or in some cases, even without inspection in 2021.
Should I sell now or wait 2023?
Now is a great time for you to sell your house! Especially since rates are expected to continue to rise throughout 2023. This means that some buyers will be pushed out of the market by high interest rates, forcing home sellers to drop their prices.
Is now a good time to buy or sell a house?
With constant supply constraints and moderate buyer demand, now is a good time to sell your house. And with loan accounts mounting, it may be preferable to sell sooner rather than later; if rates go much higher, prospective buyers may abandon their property search.
Where will house prices be in 5 years?
That figure is five-year cumulative house price growth nationwide, meaning that the 8% price growth in 2022 will lead to 1% growth in 2023, 2% for 2024 and 2025, and 3% for 2026.
How much will houses be worth in 2030? It’s almost a given that despite current high prices, houses will cost even more 10 years down the road. According to RenoFi, the cost of a single-family home in the United States is likely to reach $382,000 by 2030.
Will houses get cheaper in the future?
The median home price in California is expected to fall 8.8 percent to $758,600 in 2023, after rising 5.7 percent to $831,460 in 2022 from $786,700 in 2021. Next year’s median price increase will be slowed by a less competitive housing market for home buyers and stabilization in homebuyers. the mix of home sales.
Will my house be worth more in 2023?
Redfin economists expect national home prices to be flat to 4% higher in the spring of 2023 compared to the previous year, due to slowing or negative economic growth and rising unemployment. Such a slowdown in year-over-year price growth would be significant.
Is 2022 good year to buy a house?
Less Competition For Homes For Sale Another reason that Fall 2022 is a good time to buy a home is that competition for homes is lower. According to the National Association of REALTORS®, more sellers have homes for sale than at any point in the last twelve months.
Will house prices drop in 2025 UK?
By the end of 2025, this will fall further to 40.6% below the benchmark from April to June 2022, but still higher than at the start of 2022, and above the post-financial crisis average. This forecast is dependent on a slight decline in mortgage rates and a 12pc house price drop over the next two years.
What is the prediction for the housing market in the next 5 years?
Another 24% predicted that the housing market change will come in 2024. 13% expect the market to favor home buyers in 2025. While only 8% expect this to happen sometime in 2026 or sometime in the next five years.
Will UK house prices ever fall?
Interest rate forecasts This in turn could push average mortgage rates above 8% (although still historically low, that is more than double the 1.6% rate recorded at the end of 2021) Based on this data, Capital Economics predicted a rise in the house prices throughout 2022, before declining by 5% in 2023.
What happens during a recession 2022?
In basic terms, a recession is when the economy’s performance declines over an extended period of several months, marked by GDP contraction, higher unemployment rates, and lower consumer spending. During a recession, people can experience major impacts on their daily lives.
Is there a recession coming in 2022? The US has already experienced two consecutive quarters of negative GDP growth in 2022, which some people consider a recession. But others expect the National Bureau of Economic Research to make the final call—and it has yet to do so.
What does a recession mean in 2022?
A recession causes the stock market to fall Consumers will cut back on their spending, putting less money into the economy, which means companies will report lower earnings. To make matters worse, some investors will liquidate their stocks in response to recession fears, rising inflation and interest rates.
What will happen to economy in 2022?
Inflation and uncertainty The cost of living crisis, tightening financial conditions in most regions, the Russian invasion of Ukraine and the ongoing COVID-19 pandemic all weigh heavily on the outlook. Global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023.
What does a recession mean to the average person?
Recession means higher interest rates Higher interest rates mean you have to spend more money on your current debt, and you’ll think twice before taking on new debt. Your credit card balance will now come with higher payments, but your mortgage payments will stay the same if you have a fixed rate.
How long does a recession usually last?
3. How long do recessions last? The good news is that recessions generally don’t last very long. Our analysis of 11 cycles since 1950 shows that recessions have lasted between two and 18 months, with the average around 10 months.