The Market Crash Crowd Is Loud, But the Data Says Otherwise

A lot of people are still waiting for the housing market to crack. And honestly, I get it. National headlines have been full of recession fears, weak consumer confidence, global tension, and slower home sales.

But here in San Diego, we are not in a price crash. We are in a transaction slowdown. Those are very different things.

Locally, detached home prices rose 2.4 percent year over year to $1.1 million in March, and inventory for detached homes was actually down 21.5 percent from a year ago. We only have about two months worth of homes on the market right now. A normal market would have closer to five or six months of supply. That is not a market that is about to crash.

So what is really happening?

Buyers are hesitant because affordability is stretched and mortgage rates are still hovering in the mid 6 percent range. But demand has not disappeared. It is being delayed.

Nationally, inventory is rising a bit, but it is still well below normal levels, and San Diego remains especially tight in the detached market. The loudest people calling for a crash are confusing frustration with fundamentals. Frustration about affordability is real and valid. But frustration does not create supply, and supply is what drives pricing.

My take on what comes next

The demand being bottled up right now is real. When rates ease meaningfully, even slightly, San Diego could move very quickly. The buyers waiting on the sidelines will compete against each other, and sellers who held off will list into that renewed competition.

For Buyers

Patience and precision. This is a market that rewards buyers who know what they want, have their financing dialed in, and are ready to move when the right property appears. The people who will feel the most regret are those who waited for a crash that did not come and missed the window to buy at today's prices before rates eventually normalized.

For Sellers

This is no longer a market where sloppy pricing works. Buyers are doing their homework. The sellers who are succeeding are pricing correctly from day one and presenting their homes in the best possible light.

Ready to make a move? Give me a call today.