The San Diego housing market has experienced a few nervous weeks. Mortgage interest rates were calm and low for years, and people benefited from relatively cheap mortgages. Unfortunately, it looks as though such days are gone, and it may be a while before they come back. Despite all of this, there are several reasons to believe that the San Diego housing market won’t crash in 2023.
Here are seven reasons why the San Diego housing market is unlikely to experience a crash in 2023:
Lack of housing inventory
The main reason why the market has cooled off is that there simply aren’t enough homes for sale. The number of listings in San Diego has decreased by 31% since last year, according to data from the S&PCoreLogic Case-Shiller National Home Price Index. Put simply, demand is outstripping supply, which is keeping prices elevated.
Population growth
San Diego is one of the fastest-growing cities in the country. As more people move here, the demand for housing will continue to increase. This will help keep prices from crashing.
Economic growth
Another factor that is helping to support the housing market is strong economic growth. According to the U.S. Department of Housing and Urban Development, San Diego’s economy is expected to grow by 2.5% this year and 2.6% next year. This will lead to more job creation and higher wages, which will increase the demand for housing.
The strong economy in San Diego is helping to drive housing demand. With more people working and making money, they’ll be looking to buy homes. This will help support prices.
Low unemployment rate
The unemployment rate in San Diego is currently 3.4%, which is well below the national average of 4%. A tight labor market usually leads to higher wages and more people buying homes.
Limited supply
There’s only so much land available for new construction in San Diego. This limited supply will help to keep prices from falling too far.
Anti-housing sentiment
There has been a lot of anti-housing sentiment lately, both in San Diego and in other parts of California. This has led to calls for more density controls and rent control, which could make it harder for developers to build new homes and could lead to fewer people moving to San Diego. However, it’s important to note that these potential changes are still years away from being implemented if they happen at all.
A healthy mix of buyers
There is a healthy mix of first-time buyers, move-up buyers, and investors in the market. This helps to prevent any one group from driving prices too high or too low.
In conclusion, there are several reasons why a crash in the San Diego housing market is unlikely to occur in 2023. Nevertheless, it’s important to keep an eye on changes in the market and be prepared for anything that might happen down the road.
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