5 trends to watch for San Diego homebuyers

Sponsored content provided by Prevu Real Estate

The real estate market in San Diego was red hot in 2021. 

The Federal Reserve has kept rates low, spurring a homebuying wave from 2020 through 2021. But what was once a tailwind can become a near-term headwind for America's Finest City.

Home prices shot up, inventory dried up, and bidding wars have become the norm over the past two years.

As we enter 2022, buyers want to know what trends will drive the San Diego real estate market. That is why the team at Prevu Real Estate compiled a guide of the most important trends to watch for aspiring homeowners. 

Sales prices will continue to rise

Buyers want to know what the San Diego housing market has in store for 2022.

Home prices grew over 27% from 2020 to 2021, the second-highest in the country, following Phoenix, Arizona. Homes sell quickly in San Diego as buyers from San Francisco and other parts of the state move south.

New buyers, coupled with low inventory, means sales will be competitive in the coming year. And while rising interest rates should curb the steep pricing hikes of 2021, demand will remain high.

Commission rebates will save buyers thousands

San Diego buyers face high demand, rising interest rates, and low housing stock in 2022.

But there is a way to save thousands at closing in the new year. Buyers can find financial savings by working with a buyer's agent that provides commission rebates.

Most brokers split the commission fee with the listing agent. But brokerages like Prevu Real Estate provide a portion of that fee back to the buyer via their Smart Buyer Rebate Program.

While prices are not likely to fall in the new year, buyers who stand to receive cash back from their broker can make their home purchase more affordable.

Mortgage interest rates will rise

It is no secret that inventory is constrained in San Diego.

Before the wide availability of low-interest financing, San Diego homes cost a pretty penny. But after the Fed lowered interest rates, already expensive homes shot to astronomical values due to bidding wars empowered by the low cost of borrowing.

And even with the promise of windfall from a sale, many San Diego owners resisted selling in fear of not securing their next home amidst the competition.

The Fed is expected to raise rates in 2022 to curb rising inflation. The resulting increase in mortgage rates will increase borrowing costs for some homebuyers and slow the pace of home price increases witnessed in recent years.

As a result, a greater sense of normalcy may return with less competition, and some experts anticipate an improvement in inventory as previously hesitant sellers list their homes.

But even with new listings, demand will continue to remain high in the city.

Demand to remain high

Buyers fall in love with the great weather and surfside city living on the sun-kissed streets of San Diego.

But as many offices create hybrid or complete work from home plans, buyers from all over the state flock to the region to make a home. 

This mad dash of buyers contributed to the high demand and consequent high prices characterizing the market in 2021. This demand contributed to San Diego seeing the second-highest price growth in the nation.

But demand is not likely to scale back any time soon. San Diego homes provide access to downtown and the beach, all at an affordable price point, compared to the rest of the state.

Inventory will remain constrained

Several factors contribute to the constrained inventory in San Diego. Even if holdout sellers list their properties en masse, there is still an issue with housing demand outpacing new construction.

The shared border with Mexico means the city can’t expand south, and the Pacific Ocean blocks development to the west. Plus, vast nature preserves surround the north and eastern boundaries of the city. But even when there is land to develop, issues arise.

First-time buyers have trouble finding starter homes, and many local administrations push back against high-density developments. Even building starter homes is difficult for developers, who have to get multiple permits before building.

The lack of new construction and resale homes means buyers will continue to face tight inventory in the coming year.

Interested in buying a house in San Diego? Browse listings and see how much you can save with Prevu’s commission rebate.


Prevu Real Estate, Inc. is a licensed real estate broker in California, license number 02134758.

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