Due to interest rates remaining low combined with an economy that is still growing, the housing market in San Diego is in an excellent position. Despite the unexpected drop in housing prices the previous October, prices are once again on the rise. Economists have forecasted more growth in the upcoming year in both new construction and home sales. San Diego has not only kept pace but in some cases has outpaced the national trends.
Realtor.com has stated the median home price of the nation is at $230.000. This is eight per cent higher than it was in February of 2015. By the end of 2015 the average price in San Diego was $475,000. This figure showed an increase of eight per cent over the year before. Where this may not be the best of news for the buyers it is exceptional news for the sellers. According to Real Estate expert Than Merrill, who owns and operates Fortunebuilders, a real estate education company specializing in investing, “San Diego real estate investors and homeowners saw one-year equity gains of $52,565 while the national average saw gains of $15,781.”
Realtor.com also conducted a survey that showed San Diego residents need to earn $103,165 yearly to be able to afford to buy and maintain a home. This figure includes taxes, principal, insurance payments and interest on the home. Nationally the average is a little over $51,000. This puts San Diego in the second to last in affordability just below San Francisco. That being said, San Diego has been listed as being among the ten hottest markets in the nation.
Residential construction is once again on the rise in San Diego. A research company called Metrostudy has forecast an increase of 14.6 per cent in housing sales this year. Metrostudy specializes in data, consulting, analytics and research regarding the housing industry. Dodge Data & Analytics shows a 41 per cent increase in the construction of residential projects beginning in January 2016. Residential construction has accounted for more than $143.9 million of the total of $270.7 million in construction projects.
Residential construction intended for multifamily occupation was well ahead of the construction for single families. The comparison showed 3,200 residences started for single families compared to 6,100 for multifamily. Both types of residences are expected to continue building.
The prices of homes in San Diego are expected to continue to rise but at a slower pace. This is due to a tighter supply in available inventory.