I want to share an update on the real estate market in San Diego County. We’ve had a decade-long rising market and low interest rates, but I think this is going to be an interesting year.
First, let’s recap what happened in December 2019. In December, closed sales were up 7.7% for detached homes compared to December 2018 and up 33.9% for attached homes. This is a massive improvement. The median price for detached homes in San Diego County was up 6.7% and 6.4% for attached homes, which is a healthy appreciation. Days on market for detached homes was 35 days, and the months’ supply of inventory was just 1.4 months.
We have become accustomed to years of low interest rates. Over the last decade, the average interest rate was under 5%. If we put that into perspective, the decade before that (2000 to 2009), the average mortgage interest rate was over 6%. The decade before that (1990 to 1999), it was over 8%, and the one before that (1980 to 1989) was over 12%.
Experts from the National Association of Realtors and MBA (Mortgage Banking Association), Fannie Mae, and Freddie Mac all predict that mortgage rates will stay under 4% this year! The chance of recession has been lowered by most experts as well. A year ago, people were fully anticipating a recession, but now most say there’s less than a 30% chance that we’ll soon have a recession. However, we will keep our eye on what happens with trade deals and the results from them. If we do have a recession, most believe it will be mild.
Overall, 2020 should be a solid year for real estate in San Diego County and the nation as a whole. With limited home supply, most experts are forecasting a 3% to 5% appreciation.
If you’re considering buying or selling and you want to discuss your specific situation, give me a call or send me an email. I look forward to speaking with you.