August San Diego Real Estate Market Forecast 2019
It’s your mid-year real estate market update. Three things to think about when you are considering to buy or sell. Are you curious about what the projections are in relation to the housing market for the rest of the year?
Hi, we’re John and Elizabeth Finley with The Finley group. If you’re thinking of selling or buying in Del Mar, Carmel Valley, Solana beach, Encinitas, Carlsbad, California, San Diego County, here are some things to consider as we head into the coming months.
First of all, home prices are appreciating at normal rates. Over the past 10 years, we’ve seen home prices appreciating significantly from one year to the next. We just keep going up and up.
Well, according to the experts at the Home Price Expectation Survey, Fannie Mae, Freddie Mac, and the Mortgage Bankers Association, they are anticipating appreciation to continue to go up as we move into 2020 but at more normal levels, which they are estimating at about 3.6%.
Secondly, interest rates are still very low. In the 1980s, rates were as high as 18%. The average interest rate over the last 30 years has been 8.27%. And today, they’re under 4%, which is considerably lower than the average over the past 30 years.
Lastly, we need to remember that an impending recession does not mean housing crisis and crash. In fact, financial analyst Morgan Housel tweeted, “An interesting thing is the widespread assumption that the next recession will be as bad as 2008. Natural to think that way, but statistically highly unlikely. Could be over before you realized it began.”.
And think about this. Oddly enough, in three out of the last five recessions that the United States faced from 1980 to 2008, home prices actually went up.
And let’s note, 2008 was the worst in regards to housing prices declining, but we need to remind ourselves why that was happening. Notes were being sold to investors as A-paper that we’re actually D-paper. Loans were being approved that had no business being approved. An example of that would be approving people with stated income loans. These things are just not happening anymore. In order to get a loan approved now, they basically want your first-born child.
So let’s recap. The experts are anticipating normal appreciation heading into 2020. Interest rates are low and our anticipated to remain low. And if there is a recession, that does not mean housing crisis, but more likely will mean normal levels of appreciation.
So what does this mean for you? It means get off of the fence, make the move, and don’t forget the wonderful advantages you may receive from owning a home and being able to write off the interest.
We hope this mid-year market update was helpful, and feel free to reach out to us for any of your real estate related needs or for anything at all that we can do for you.
And as always, make it a great home selling and buying day.