San Diego Real Estate January Local Lowdown

San Diego Real Estate January Local Lowdown

As we step into the new year, the San Diego real estate landscape reveals intriguing patterns and projections. In this local lowdown for January, we delve into key metrics shaping the market, from median prices to inventory dynamics, providing valuable insights for both buyers and sellers.


Median prices close 2023 up 8% for single-family homes and 11% for condos

In San Diego County, home prices have displayed remarkable resilience, defying the impact of rising mortgage rates. Although hitting all-time highs in August 2023, median prices for single-family homes and condos experienced slight contractions by 7.4% and 5.5% in December, respectively. This seasonal dip is considered normal in the latter half of the year, with expectations for prices to remain just below peak levels during the winter months. However, as interest rates decline, a resurgence in prices is anticipated, potentially reaching new highs in the first half of 2024. The persistent downward trend in inventory and limited new listings has contributed to the current market dynamics, with an outlook for increased activity in the spring and summer.


High mortgage rates have influenced both supply and demand dynamics. With rates expected to fall, a surge in sellers is anticipated, aligning with the potential for rising demand. Unlike the atypical inventory patterns observed in 2023, the outlook for 2024 suggests a return to more typical seasonal trends, providing a more balanced market environment.

Single-family home and condo inventory hit all-time lows after 16-month downward trend

The past 16 months have seen a continuous decline in single-family home and condo inventory, reaching all-time lows in November and December. This departure from the usual seasonal patterns, where inventory peaks in July or August and gradually decreases, has been a result of fewer sellers entering the market, especially in the initial half of 2023. With historic lows in inventory, the number of new listings becomes a crucial determinant of future sales. Both month-over-month and year-over-year comparisons reveal significant declines in new listings and sales, emphasizing the challenges posed by low inventory levels.


Buyers, in a market where demand is slowing, are gaining negotiation power and paying slightly less than the asking price on average. While sellers received 100% of the list price in July 2023, this percentage dropped to 97% in December. However, despite this trend, buyers paid, on average, 3% more in December 2023 compared to the same period in the previous year. The anticipation is that inventory will remain historically low in the upcoming months, leading to increased competition among buyers in the spring, potentially driving price appreciation.

Months of Supply Inventory in December 2023 indicated a balanced market

Examining the supply-demand relationship through Months of Supply Inventory (MSI), the market appears balanced in December 2023. Typically indicating a balanced market when around three months, MSI fell below this threshold in the first quarter of the previous year. Although fairly stable from March to August, it ticked upward from August to December. Currently, MSI suggests a balanced market for both single-family homes and condos, aligning with typical trends in the fall and winter months.

As we navigate through the intricacies of San Diego's real estate landscape in January, these insights offer a compass for prospective buyers and sellers. Stay tuned for further updates as we monitor the market's evolution in the coming months.

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