2019 San Diego real estate Outlook
Well, before we get into my personal Outlook for the 2019 San Diego real estate market, that’s take a look at how we did in 2018. According to the California Association of realtors, California home prices increased by 6.2% over 2017. Also, home ownership rates in San Diego have increased slightly. In the second quarter of 2018 the San Diego home ownership rate was 54.7% compared to the first quarter of 2018. If you look at the home ownership rate in the second quarter of 2017 it was higher at 56.1%. Actually for 2018 the home ownership rate has decreased slightly, but overall during 2018 the home ownership rate was improving.
2019 San Diego real estate Outlook
Of course, the real estate market cannot improve without a solid economic underpinning. California’s economy grew 4.7% in the 12 months that ended February 2018. This increase was substantially more than the national rate which was just 2.8% for the same period.
One of the other main underpinnings for the real estate market is favorable or stable interest rates. With interest rates increasing last year, and many predicting that there will be further increases in 2019, this is a major detriment to the San Diego and the California real estate market in general. San Diego home prices and California home prices are substantially higher than most other metropolitan areas. Therefore, increasing interest rates have a major impact on what buyers can afford.
Kiplinger has stated that even though the Federal Reserve Board may hold off on interest rate increases until June, they don’t rule out one or two additional interest rate hikes later this year. They also stated that if the US economy strengthens later this year, as they are anticipating, by the end of 2019 the 30 year fixed may rate mortgage would likely rise to 4.9% and the 15 year fixed rate mortgage would increase to 4.2%.
Let’s take a look at what others are saying about the 2019 San Diego real estate Outlook and the California real estate Outlook in general:
Zillow has suggested that home prices will grow 5.7% over the next 12 months. The California Association of realtors expects average home prices to increase 3.1% in 2019.
In November 2018 San Diego home sales were actually down 8.4% when compared to October 2018 and down 11% when compared to November 2017.
Personally, my 2019 San Diego real estate Outlook is for San Diego home prices to remain flat throughout the year. My exception to this outlook is that if the Federal Reserve Board raises interest rates, I would not be surprised to see San Diego real estate prices slightly lower at the end of this year.
Higher interest rates combined with our traditionally higher home prices erodes affordability and thereby housing demand throughout California.
For information about San Diego City visit the official site
San Diego real estate 2019 Outlook
