San Diego Market Update March 2019

Despite a strong U.S. economy, historically low unemployment and steady wage growth, home sales began to slow across the nation late last year. Blame was given to a combination of high prices and a steady stream of interest rate hikes by the Federal Reserve. This month, the Fed responded to the growing affordability conundrum. In a move described as a patient approach to further rate changes, the Fed did not increase rates during January 2019.

Closed Sales decreased 13.3 percent for Detached homes and 26.2 percent for Attached homes. Pending Sales decreased 2.6 percent for Detached homes and 5.8 percent for Attached homes. Inventory increased 28.3 percent for Detached homes and 45.2 percent for Attached homes. The Median Sales Price was up 3.4 percent to $615,000 for Detached homes and 2.5 percent to $415,000 for Attached homes.

Days on Market increased 13.5 percent for Detached homes and 28.6 percent for Attached homes. Supply increased 41.2 percent for Detached homes and 61.5 percent for Attached homes.

While the home affordability topic will continue to set the tone for the 2019 housing market, early signs point to an improving inventory situation, including in several markets that are beginning to show regular year-over-year percentage increases. As motivated sellers attempt to get a jump on annual goals, many new listings enter the market immediately after the turn of a calendar year. If home price appreciation falls more in line with wage growth, and rates can hold firm, consumer confidence and affordability are likely to improve.

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