San Diego Real Estate Market Forecast 2022 | 2023 (Updated)

We entered the real estate market of San Diego in 2022 with expectations of a continued bull market in housing sales balanced by low mortgage interest rates. We are now several months into the year, and there have been some dramatic changes in the real estate industry and the financial world. All statistics are as of this writing.

Inflation is no longer a forecast; it is a reality. We have been used to interest rates of less than 5%, and we now must look at the possibility of higher costs for mortgages in Southern California. It is a sobering thought that there might be high house prices and high-interest rates. Therefore, it is an excellent time to take a second look at where the market is going and what a potential homebuyer should be thinking about as the year progresses.

Here's a quick rundown of our list:

The National Prognosis

We need to put politics and opinions aside for a moment. Instead, we should be looking at the figures and what they suggest to us. We also must keep in mind that anything can cause a change in direction. Economic forecasting is vulnerable to both crisis and good news. 

Recent inflation figures have shocked the system, and American consumers have not seen such data in decades. The annual inflation rate nationally was 8.5% in March 2022. That is the highest it has been since December 1981. In February, the rate went down to 7.9%, which was lower than the forecast. However, gasoline prices went up 40%, and the consumer price index rose 6.5%, which was below forecasts but still more than in 40 years. The inflation rate for May is projected to be 8.2%.

These may be the high figures for the year. Bloomberg has predicted that inflation will go up by 5.1%, and the war in Ukraine can influence that final figure. Forecasts into the future are optimistic, with projected rates going down a little bit. Nevertheless, we are looking at an increase in overall prices. Building materials, those which are used for residential construction, are up 8% thus far in 2022. Those increases in building materials will impact the number of new houses contractors will build this year. 

It does not look too good for mortgage rates to go down soon. The Federal Reserve intends to raise the Federal Funds rates several times this year to bring down inflation, and experts expect that mortgage rates will continue to move upward. How high and how fast the interest rates will go up on mortgages depends on whether the Feds can curb them.

Currently, the National Mortgage Interest Rate Average is 5.48% for a 30-year fixed mortgage and 4.74% for a 15-year fixed mortgage.

Get Pre-Approved for a San Diego home loan in 60 seconds or less – no social security number needed. Get Started ›

San Diego Rate of Inflation

Okay, we have amazing beaches and fantastic weather, but we must pay for these luxuries. In March, the Consumer Price Index showed a 7.9% increase from the same time last year. Unfortunately, the Cost of Living Index does not do us any favors. We are currently at 160.4. While that is undoubtedly better than San Francisco, which registers 244, the Cost of Living index jumped dramatically over 2021.

What might scare the pants off the prospective house buyers is how the value of San Diego homes has jumped. According to Zillow, the typical home value of San Diego houses is now $969,595. That is an increase of 27.9% over the past year. To understand how prices skyrocketed in the recent past, the value of a home in November 2021 was $885,000. It paints a rather grim picture for those contemplating buying a house.

Mortgage Rates in San Diego

The secret to house affordability in San Diego is that low-interest rates balance the high sales price. Buyers were once concerned but not stressed out by what their monthly mortgage bill was going to be. Well, now we have a situation where the cost of housing is rising. The same is true for mortgage rates.

As of this writing, the 30-year fixed rate in San Diego is 5.4515%. The mortgage interest for a 15-year fixed rate is 4.512%.

When you compare it to the national figures cited above, that does not seem too bad. But let's look at what this means in real dollars when you compare the cost of the house in November 2021 with the price right now.

If you were only going with the November value of a home and used the above 30-year fixed rate, the annual interest payment would be $48,245.77. Considering the present home value and that same 30-year fixed interest rate, the current annual interest payment would be $52,857.47. We will do the math for you: the difference is $4611.70. Yeah, things are starting to look a little bit rough.

Own a home in San Diego and you want to get a personalized home valuation for it to see how much you can walk away in profit in this exciting market? See Now ›

Available Housing in San Diego

Prices are affected by the supply of available units. A large market of houses for sale either brings prices down or arrests the growth. San Diego is a wonderful place to live if you can afford it. We have been lucky compared to San Francisco in many areas, and we have always thought of ourselves as a more livable place. Unfortunately, we have some less than wonderful news.

San Diego has bypassed San Francisco and is the nation's least affordable metropolitan area for housing. That was the finding of OJO Labs in a recent research study. So, we are in an unusual predicament. The greater San Diego area shows a decline in existing home sales, but sales prices continue to rise. 

Inventory is a problem. A housing market is considered balanced if there is a 4 to 6-month inventory of homes available. When it comes to existing single-family homes, San Diego has an inventory of 1.4 months! There are not enough sellers to bring the prices down. It is a seller's market currently. Real estate can only switch to a buyer's market if supply rises to an inventory of five months. That is not likely.

New listings only add to this somewhat gloomy figure in the San Diego area. As of February 2022, listings have decreased 15.8% for Detached Homes and 23.3% for Attached Homes compared to February 2021. In addition, pending sales are falling in the double digits: 18.9% for Detached Homes and 18.7% for Attached Homes. Overall, the Months Supply of Inventory decreased by 10.0% for detached homes and 33.3% for attached homes.

Has Covid-19 made any impact on the supply? That does not appear to be the case, but something pandemic-related impacts property availability.

Historically, evictions and foreclosures will bring houses onto the market as former tenants lose the right to rent or own the property. Recently, California courts suspended eviction foreclosure proceedings across California. The suspension is intended to stay in effect until 90 days after the coronavirus state of emergency has been lifted. We agree that this is important for the common good, and California needs to be compassionate to those who can no longer afford housing due to pandemic-related job loss. However, there are consequences.

A source of new listings is now temporarily on hold. The process for evictions and foreclosures without having additional constraints imposed. The court-ordered suspension makes the housing market even tighter than it was before.

We must face the facts. San Diego is the most expensive housing market in the United States. Earnings have not been able to keep pace with increasing house prices, and we are locked into a seller's market for some time to come. Now what?

We know that what we have shared with you in this article sounds depressing. You spent years saving up for a house and made extraordinary sacrifices for that down payment and rearranged your budget to afford mortgage payments. There is always a silver lining to a dark cloud when we look at things. You must find that white streak, which takes a little bit of focused research.

We do not think it is time for prospective buyers to pass around the crying towel. San Diego County has opportunities, but it requires a more focused approach to house hunting and financing. Of course, neither is impossible, but both need to be done.

Get Pre-Approved in 60 Seconds... (No Social Security Number Needed)

By proceeding, you consent to receive calls and texts at the number you provided, including marketing by auto-dialer, pre-recorded voicemail, and email, from this site's operators about real estate related matters, but not as a condition of purchase. You also agree to our Terms of Service, and to our Privacy Policy regarding the information relating to you. Message and data rates may apply. This consent applies even if you are on a corporate, state or national Do Not Call list. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Where is the Money Coming From?

Hopefully, you have been very sensible and saved up your money for a down payment. The big challenge is going to be where to get a mortgage loan. You are fortunate if you live in San Diego County. There are hundreds of financial institutions that you can approach about the possibility of a loan.

What is your credit score look like right now? If you have a score of over 750, you stand an excellent chance of getting a mortgage loan with a reasonable, if not low, figure. If you do not, you might do something about that score as soon as possible. Low credit scores do not necessarily mean that you will not get a loan, but you will pay a higher interest rate, which could cost you thousands of dollars over the life of a mortgage. So, whatever you can do to bring that credit score up, which would include paying off some of your credit card debt and paying other bills perhaps ahead of the due date, will help.

You have some alternatives to commercial lending institutions if you want to consider them. Federal Housing Administration (FHA) loans are standard financial instruments for those who are first-time buyers. A 3.5% down payment for those with credit scores over 580 is hard to resist. You also can qualify if the credit score is around 500, provided you are willing to come up with a 10% down payment. In the price negotiations, a seller can pay up to 6% of the loan amount that will cover closing costs for the buyer.

Of course, FHA is not the only way to go depending on your eligibility. The United States Department of Agriculture (USDA) also sponsors home mortgage loans, and if you are a veteran check out what the Veterans Administration (VA) will provide.

Find out what the latest and greatest San Diego home loans are right now. Detailed video and post reveals all. See it Now ›

House Hunting with the Purpose

Inflation and rising interest rates are scary stories, but these financial facts should not frighten you into making a poor decision. The house is a home, and though you are looking for an affordable price, you want a residence where you can feel safe and comfortable. Let's face it; you will get a lower price if you happen to be in a slum or high-crime area. Do you truly want to raise your kids there?

House hunting includes looking at the neighborhood and what the amenities are. The house itself needs an appropriate number of bedrooms, bathrooms, a garage, and a suitable living space. You should figure out the dimensions of the property you want before you start looking.

Seek Professional Help

We do not mean that you should see a counselor or therapist! You are not crazy for trying to buy a house in these expensive times. However, we think you would be out of your mind if you tried to do this solo. Buying a home in San Diego County is not a DIY project.

We mean that you should be thinking about working with a real estate agent when you go looking for that dream house. Forget what some of the cable TV guys are telling you about going alone. You are asking for trouble; we mean the expensive kind. People who try to buy a house by themselves and are unfamiliar with real estate can lose out. Real estate agents will help with finances, shop for the right place, and be a great ally during the closing process. Agents can negotiate a sales price down a few thousand dollars at least. In addition, you can save on the final mortgage loan when you have a good agent.

We have helped people purchase property in San Diego County for years, and we know the territory. We can help you find the right place that fits your lifestyle and budget nicely. We are more than just real estate agents; we are a licensed mortgage loan originator. That will be extremely helpful as you arrange your house by finances.

The real estate market in San Diego has some challenges, but they are not impossible mountains to climb. We will give you the help that you need. If you want to know more about us, please feel free to contact us as soon as you are ready. We are here to make the house hunting and buying process simple.

☎ I would love to help assist you with your home purchase, home sale, or home loan - please feel free to give me a call, text, or use the form below. 

Your Market Forecast Insider, 

Scott

Get Scott's Personal Help Below...


This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Where Do You Want To Go Next?

By clicking “Send” I/We agree by electronic signature as stated below: 1) To be contacted by telephone even if the telephone number appears on a State/National Do Not Call registry or any company’s Do Not Contact lists. 2) To this website’s Privacy Policy and Terms of Use.

See San Diego's Newest Listings Below...

3077 Properties
Page 1 of 86
Open 5/28
5051 Savannah St. San Diego, CA 92110
$1,299,999
Neighborhood: Bay Park
3
Beds
3
Baths
1,808
Sq.Ft.
2020
Year Built
1
Day on Site
220012991
MLS
Live the good life in this charming 3 bedroom and 3 bathroom home located in Bay Park, San Diego. This custom home was built in 2020 with only one owner. The home features a spacious living room,...
Open 5/28
13622 Paseo De La Huerta Poway, CA 92064
$3,400,000
Neighborhood: Green Valley Estates
5
Beds
4F11/2
Baths
5,759
Sq.Ft.
1993
Year Built
1
Day on Site
220012992
MLS
Welcome to this sprawling, premier Poway property in Green Valley Estates. You are captivated the minute you pull up to the semi-circular driveway, take in the lush landscaping, and make your way...
Coming Soon on 05/27
1884 Aquamarine Ct #8 Chula Vista, CA 91913
$675,000
Neighborhood: Otay Ranch
3
Beds
3F11/2
Baths
1,663
Sq.Ft.
2013
Year Built
1
Day on Site
220012993
MLS
Bright and beautiful end unit in the highly desired Otay Ranch community! Surrounded by lush greenery, this 3 story townhome offers a first floor bedroom with an attached full bath and patio. The...
$1,849,000
Neighborhood: Scripps Highlands
4
Beds
2F11/2
Baths
2,335
Sq.Ft.
2003
Year Built
1
Day on Site
220012995
MLS
Enjoy endless views to the ocean, city lights and breathtaking San Diego sunsets every night. Rare opportunity to live in the most sought after community of Presidio/Traviata in Scripps Highlands....
$2,995,000
Neighborhood: Encinitas Ranch
4
Beds
4F11/2
Baths
4,262
Sq.Ft.
2001
Year Built
1
Day on Site
305451063
MLS
No description available...
4
Beds
3
Baths
2,700
Sq.Ft.
1987
Year Built
1
Day on Site
305451577
MLS
No description available...
4
Beds
3
Baths
2,633
Sq.Ft.
1968
Year Built
1
Day on Site
305455268
MLS
Welcome Home! This incredible single story POOL home is located in the highly desirable neighborhood of Green Valley. Located on a quiet street, this beautiful home offers 4 beds, 3 baths, 2,633 sq...
3
Beds
3
Baths
2,124
Sq.Ft.
1989
Year Built
1
Day on Site
305455607
MLS
Coming Soon: Adobe Home on 2.78 acres with rolling hills views. Private and peaceful yet conveniently located.

Coming Soon: Adobe Home on 2.78 acres with rolling hills views. Private and...
4
Beds
3
Baths
2,016
Sq.Ft.
1979
Year Built
1
Day on Site
305456957
MLS
STUNNING Single Story Ranch Style POOL HOME! This beautiful home sits perfectly at the end of a cul-de-sac on a half acre lot in Vistas most desirable neighborhood. Offering 4 spacious bedrooms, 3...
$1,624,000
Neighborhood: Whittingham
4
Beds
3F11/2
Baths
3,183
Sq.Ft.
2018
Year Built
1
Day on Site
305457226
MLS
Single level Whittingham Home in Harmony Grove Village boasts panoramic views, 4 bedrooms, 3.5 bathrooms, three car garage, 3,183 square feet, over 27,000 square foot lot, upgraded flooring,...
$1,400,000
Neighborhood: Bay Park
4
Beds
2
Baths
1,524
Sq.Ft.
1956
Year Built
1
Day on Site
305457353
MLS
LOCATION, LOCATION, LOCATION. COVETED BAY PARK SINGLE LEVEL 4 BDRM HOME WITH HUGE SUNROOM OVERLOOKING BACKYARD CANYON AND GOLF COURSE VIEW. MISSION BAY VIEW FROM FRONT, PEEK A BOO VIEW FROM BEDROOM....
$2,295,000
Neighborhood: Morning Ridge
5
Beds
5
Baths
3,628
Sq.Ft.
2005
Year Built
1
Day on Site
305457622
MLS
Welcome to Morning Ridge adjacent to Aviara Community Park. This premium view home is located on a cul-de-sac with a quiet location and features a backyard with a large patio and fire-pit.The...
$889,000
Neighborhood: Hillsborough
4
Beds
2F11/2
Baths
1,980
Sq.Ft.
2003
Year Built
1
Day on Site
305457737
MLS
Welcome home to this turnkey beauty in the highly desirable neighborhood of Hillsborough at Otay Ranch! Remodeled with bright and airy finishes, a kitchen island, quartz countertops, custom...
2
Beds
2
Baths
1,807
Sq.Ft.
1984
Year Built
1
Day on Site
305458140
MLS
"Costa Smeralda" model (1807 SF) situated on a large pie-shaped lot overlooking the GOLF COURSE and CLUBHOUSE with OCEAN VIEWS. This two-story home "lives" like a single story-2 bedrooms and 2...
$750,000
Neighborhood: Princess Crest Estates
3
Beds
2
Baths
1,344
Sq.Ft.
1965
Year Built
1
Day on Site
305459156
MLS
Opportunity knocks at this single level LIGHT fixer. Trust Sale. Large yard space. Roof appears newer, Most windows are dual pane. Replace flooring and then enjoy the creative process of making this...
$569,900
Neighborhood: North Mission Hills
1
Beds
1
Baths
732
Sq.Ft.
1978
Year Built
1
Day on Site
220012996
MLS
An absolute GEM in the heart of NORTH MISSION HILLS! Set amongst historic multi-million-dollar properties, this ground-level end unit has been thoughtfully reimagined with designer upgrades &...
$598,500
Neighborhood: Sabre Spring
2
Beds
2
Baths
904
Sq.Ft.
1994
Year Built
2
Days on Site
220012881
MLS
Bright upper level 2 bed/2 bath condo nestled into the hills in the community of Hilltop in Sabre Springs. Property has upgraded laminate flooring, kitchen cabinet, and bathroom counters as well as...
Open 5/28
17995 Caminito Pinero #299 San Diego, CA 92128
$449,000
Neighborhood: Bernardo Pines
1
Beds
1
Baths
817
Sq.Ft.
1985
Year Built
2
Days on Site
220012882
MLS
LOWEST PRICED CONDO in RB (w/o age restrictions)! Resort style living in desirable Bernardo Pines. Soaring, vaulted ceilings (18 feet) in the gorgeous family room (w/ fireplace) that flows to a...
3
Beds
2F11/2
Baths
1,476
Sq.Ft.
2006
Year Built
2
Days on Site
305398217
MLS
Great opportunity to own in the highly desirable Airoso community in the Pacific Highlands Ranch of Carmel Valley. This 2 story townhome shows true pride of ownership and features custom tile and...
$759,000
Neighborhood: La Mesa Country
2
Beds
1
Baths
1,080
Sq.Ft.
1945
Year Built
2
Days on Site
305448480
MLS
Gorgeous turn key low maintenance immaculate 1945 Craftsman home on large 9200 sq ft lot...an outdoor entertainers delight!! Features include Owned solar (13 panels)--Artificial turf yard front and...
$625,000
Neighborhood: Rams Hill
3
Beds
3
Baths
2,566
Sq.Ft.
1987
Year Built
2
Days on Site
305451563
MLS
Beautifully remodeled home in the desirable San Felipe neighborhood at Rams Hill. Desirable floor plan, with a lovely foyer, living room and kitchen that opens to family room. Hone your culinary...
4
Beds
3
Baths
2,376
Sq.Ft.
2001
Year Built
2
Days on Site
305453328
MLS
Welcome to YOUR DREAM home. This home is Oceanside living at its finest. Located less than 4 miles away from the beach, close to restaurants, Marine Corps Base Camp Pendleton, hospitals and...
2
Beds
2F11/2
Baths
1,766
Sq.Ft.
1987
Year Built
2
Days on Site
305456134
MLS
Spacious townhome in the heart of UTC near UCSD, tech/biotech research campuses, world-class shopping, restaurants, schools, and public transportation. This home is light and bright with high volume...
$1,150,000
Neighborhood: Eastlake Hills
4
Beds
3
Baths
2,749
Sq.Ft.
1988
Year Built
2
Days on Site
305457583
MLS
Highly deseriable model in the beautiful Eastlake Hills community. No Mello-Roos and low HOA. This traditional Tuscan style home has an open floor plan and features vaulted ceilings, natural...
2
Beds
2
Baths
1,257
Sq.Ft.
2019
Year Built
2
Days on Site
305457813
MLS
Just steps to Morley Field on a quiet, rarely available street, this custom Spanish bungalow was completed in 2019, with no detail overlooked and no expense spared. Featuring top of the line...
$1,025,000
Neighborhood: Otay Ranch
6
Beds
4F11/2
Baths
3,232
Sq.Ft.
2008
Year Built
2
Days on Site
305458041
MLS
Don't miss the opportunity to own this beautiful home featuring the largest floor plan and backyard in the community. Located downstairs is a full bedroom with an attached full bathroom, plus an...
3
Beds
2
Baths
1,360
Sq.Ft.
1976
Year Built
2
Days on Site
305448778
MLS
Welcome home! This charming single-story home, nestled in a quiet cul du sac, is the perfect family home. This single-story beauty features paid-off solar, a HUGE 10,000+ sq ft lot, 2 car garage, and...
$485,000
Condo: Carefree East
2
Beds
1
Baths
896
Sq.Ft.
1973
Year Built
2
Days on Site
220012883
MLS
Lovely townhouse with 2 bedroom 1 bath recently renovated with brand new kitchen with quartz countertops, backsplash and stainless steel appliances and beautiful shaker cabinets. Brand new LVP on...
$2,250,000
Neighborhood: Downtown
3
Beds
2F11/2
Baths
2,305
Sq.Ft.
2020
Year Built
2
Days on Site
305458717
MLS
Luxurious Carlsbad Coastal Living! Carlyle Carlsbad Village, built in 2020. PRIME LOCATION within a short walk to restaurants, shopping, farmers market and the beach! No one above you and end unit.....
Open 5/27
1627 Hornblend St San Diego, CA 92109
$1,299,000
Condo: Playa Pacifica
3
Beds
3
Baths
1,608
Sq.Ft.
2017
Year Built
2
Days on Site
220012885
MLS
Built in 2017, this highly sought-after Pacific Beach townhome embodies an elevated coastal lifestyle. Tastefully designed with top-notch finishes throughout, this residence offers 3-bedrooms and 3...
$3,999,000
Neighborhood: Bird Rock
4
Beds
4
Baths
2,798
Sq.Ft.
2022
Year Built
2
Days on Site
220012886
MLS
Striking modern design on the exterior meets upscale traditional finishes inside to create the perfect balance of the ideal coastal California home. 5666 Waverly is located in the highly coveted...
2
Beds
2
Baths
1,163
Sq.Ft.
2015
Year Built
2
Days on Site
220012887
MLS
OTAY RANCH VILLAGE OF MONTECITO GEM!. Located inside a resort style community zoned with-in Grade "A" schools, this corner unit Condo has it all: Open floor plan, wood flooring and carpet...
Coming Soon on 06/01
12380 Sage View Road Poway, CA 92064
$2,149,000
Neighborhood: Poway Estates
5
Beds
3
Baths
3,099
Sq.Ft.
1994
Year Built
2
Days on Site
220012888
MLS
Coming Soon value range $1,999,000 - $2,149,000. A Rare Find in the Peacefully, Private Poway Estates! You will be awe-struck as you enter into this Turnkey home with a spacious living room and...
$1,800,000
Neighborhood: University Hills
4
Beds
3
Baths
2,204
Sq.Ft.
1990
Year Built
2
Days on Site
220012889
MLS
Views! Views! Views! Well maintained single level home with an attached two-car garage located within the heart of University City. Situated on an ample .30 acre lot this amazing residence...
Open 5/26
2422 Haller St San Diego, CA 92104
$1,199,000
Neighborhood: North Park
3
Beds
2F11/2
Baths
1,651
Sq.Ft.
1988
Year Built
2
Days on Site
220012890
MLS
Enjoy this fantastic location of North Park and South Park living with your 3 bedroom 2.5 bathroom home. New wood like laminate flooring throughout. Updated kitchen featuring new stainless steel...
$3,595,000
Neighborhood: Bird Rock
4
Beds
3F11/2
Baths
2,435
Sq.Ft.
2022
Year Built
2
Days on Site
220012891
MLS
Brand new construction in La Jolla! This custom luxury home features 4 beds, 3.5 baths, 20' ceiling entryway, and 10' ceilings throughout the rest of the home. Additional features include Wolf and...

Post a Comment