Last month, I wrote that homeowners in San Diego should be thankful to own. The reason to give thanks was that the number of homes available to buy was dwindling. The number of homes actively for sale – also known as inventory – had dropped over 20% from a year ago as of October. The November number came in and the falling trend continues. San Diego pending home sales continue to climb, which further reduces inventory.
San Diego Inventory Continues to Fall
Inventory of detached homes for sale is down 21.2% from 6,038 in November 2014 to 4,759 in November 2015. Attached homes, such as condos and townhomes, fell even more. Inventory of attached homes for sale is down 28.7% from 2,485 in November 2014 to 1,772 in November 2015.
San Diego Pending Home Sales Rise
Pending home sales are those where the seller and buyer have agreed on terms and the escrow process has begun. If a listing is shown as having a “pending” status, the escrow still hasn’t “closed”.
Pending detached home sales are up 11.7% from 1,627 in November 2014 to 1,818 in November 2015. While, pending attached home sales are up 25.7% from 797 in November 2014 to 1,002 in November 2015.
Challenges for Home Buyers vs. Opportunity for Sellers
Home buyers looking for a condo or townhome will find it increasingly challenging to find the right property. As home prices rise in San Diego, first time home buyers are increasingly getting priced out of the detached home market. This trend is pushing the increase in pending sales of condos and townhomes throughout San Diego county.
As home buyers find challenges, savvy sellers see an opportunity. We all know an interest rate hike is coming. Janet L. Yellen, the Federal Reserve chairwoman, said on Wednesday, December 2nd that economic conditions were ripe for the Fed to start raising its benchmark interest rate. Historically low interest rates have driven the recent increase in buyer demand. As interest rates rise, buyer demand will fall.
So, the window of opportunity is closing for home sellers looking to take advantage of buyer demand propped up by low interest rates. Are you on the fence about selling a property? The spring of 2016 may be the perfect time to put your home on the market. You hit the prime seasonal market and will still have buyers who can get loans at low interest rates. See how I can market your property to get it sold next year.
The data in this post is current as of December 5, 2015. All data is from Sandicor, Inc., San Diego County’s Regional Multiple Listing Service (MLS).