San Diego Market Update August 2019

As was widely expected, the Federal Reserve did not change the target range for the federal funds rate – currently set at 2.25 to 2.5 percent – during their June meeting. Although the economy is still performing well due to factors such as low unemployment and solid retail sales, uncertainty remains regarding trade tensions, slowed manufacturing and meek business investments. Closed Sales decreased 16.3 percent for Detached homes and 19.9 percent for Attached homes. Pending Sales increased 6.5 percent for Detached homes but decreased 2.2 percent for Attached homes. Inventory decreased 5.6 percent for Detached homes but increased 8.2 percent for Attached homes. The Median Sales Price was up 3.2 percent to $674,900 for Detached homes and 4.8 percent to $445,000 for Attached homes. Days on Market increased 3.8 percent for Detached homes and 39.1 percent for Attached homes. Supply decreased 3.7 percent for Detached homes but increased 20.0 percent for Attached homes. In terms of relative balance between buyer and seller interests, residential real estate markets across the country are performing well within an economic expansion that will become the longest in U.S. history in July. However, there are signs of a slowing economy. The Federal Reserve considers 2.0 percent a healthy inflation rate, but the U.S. is expected to remain below that this year. The Fed has received pressure from the White House to cut rates in order to spur further economic activity, and the possibility of a rate reduction in 2019 is definitely in play following a string of increases over the last several years.

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