If you are a homeowner, should you sell your house in 2022? Real estate is a long term investment but if you have been contemplating selling your house, 2022 might be a good year to cash in for a few reasons.
We all know that the housing market has been crazy. With record growth, seemingly everyone has their eye on what real estate will do in the coming years. Homeowners looking to sell their house in 2022 should especially pay close attention this upcoming year!
Despite the challenges of 2020, it was a great year to sell your house in San Diego. In 2020 and 2021, the median San Diego home price rose 20%. These numbers have accelerated a decade-long trend of growth in the San Diego housing market. While this is ultimately great news for San Diego homeowners, there are reasons to believe this rate of growth might be slowing or even reversing.
This is not a prediction of a real estate market crash. It’s a warning to those who were already thinking about selling their home.
Many of the reasons to consider selling your house in 2021 are the same now in 2022.
Real Estate growth compared to largest US companies in 2021
Why has the real estate market been so strong?
San Diego will always be one of the hottest markets in the country. The beautiful weather, local attractions, and job market will always drive a healthy demand for housing. Additionally, geography makes it hard to develop new housing. The result of this is a plentiful source of demand and a limited amount to supply.
With that said, most believe market growth is approaching its peak. A correction is certainly coming the question is when. Here are a few things to monitor.
Why San Diego housing prices could drop. And Why You Should Maybe Sell Your House.
Several factors are already starting to make an impact on the market. Many of the elements driving strong price growth are set to reverse which will affect housing prices accordingly. If you think you might want to sell your house in 2022, we highly recommend paying close attention to these factors in the San Diego, and national market.
Government policy and infrastructure bill
Changes in government policy may contribute to changes in San Diego housing prices. Among other policies, the most notable are interest rates and infrastructure legislation.
Interest rates
Interest rates fell to record lows at the beginning of 2020 during the onset of the COVID-19 pandemic. But rates are on the rise! While they remain low relative to historical timelines, they are expected to continue to rise.
The federal reserve typically leverages interest rates to fight against inflation. With inflation fears higher than ever, so is the likelihood of a drastic increase in rates.
Of all the factors that could affect the real estate market in 2022, interest rates are the most important to monitor.
Keep close tabs on interest rates when deciding should you sell your house in 2022.
Infrastructure bill
To combat low housing infrastructure nationwide, the Biden administration has proposed a robust budget for new housing construction across the nation, including San Diego. While no bill has passed yet, it shows the government’s commitment to creating more housing. Approval of any infrastructure bill would increase available housing, changing the supply-demand ratio and lower prices.
CA SB9
SB9 is about legalizing small-scale projects driven by existing homeowners’ interests. The bill allows for the construction of multiple units on properties traditionally zoned for single family residences. CA SB9 goes into effect January 1, 2022 and could cool demand and ease supply.
Eviction moratorium
While the eviction moratorium has ended in most parts of California, tenant problems haven’t. The combination of landlord fatigue and record high prices will continue to motivate many landlords to downsize.
Leaving California
For the first time in decades, the state of California saw its population decline year over year. As the cost of living across the state continues to rise, more people are selling their property and downsizing in cheaper states. COVID-19 slowed this trend, but with reopening looming, it will quickly ramp back up.
With more people set to leave California and San Diego, more homes will hit the market. If the ‘California exodus’ trend continues, this could seriously impact home values for San Diego homeowners across the county.
COVID-19 reopening and San Diego housing
As COVID-19 cases continue to decline and restrictions continue to loosen, we expect to see an uptick in people moving and selling their homes. As people feel safe to show their homes and gain confidence in the market, we will see more San Diego homes on the market which will affect supply and prices alike. Additionally, many tech employees who migrated to San Diego during COVID are returning to their full-time offices.
Learn more about COVID safety during showings in California HERE.
Buyer fatigue in the San Diego market
Beyond all the other factors mentioned, many buyers have given up on the market. The growth of the San Diego housing market has forced home buyers to sacrifice more and more if they hope to be able to purchase a home. There is reason to believe that these market conditions have finally pushed San Diego home buyers to the brink. This is arguably the best indicator that the San Diego housing market prices have peaked.
If buyers simply refuse to match rising prices then housing prices will drop. Given the fact that San Diego housing prices have risen year over year since 2011, it’s reasonable to think a natural price reduction is due.
When should you sell your house in San Diego?
There are many factors to consider when considering if you should sell your house in 2022. If you are considering selling your house or property in San Diego, it really might be best to cash in sooner than later. With the market still high, San Diego homeowners have several good options for selling their homes. If you are indeed thinking about selling your home in San Diego, you should reach out to a trusted San Diego real estate agent and download this free guide that can walk you through all your selling options!
While new listings are still low, they will rise starting in the summer of 2022! If you are exploring the best timing to sell your home, we strongly recommend connecting with a local agent or investment firm! Our team of experts has several decades of combined experience in the San Diego housing market and eager to answer any of your questions about the market, your home value, and selling strategy.
Selling for cash with a local investor
If your property is any of the following, a cash investor might be a great option for selling your home. If you fit any of the criteria below, you might want to consider selling to a San Diego cash investor. Here are some of the scenarios where it pays to sell your house in San Diego with a cash investor.
- Offload an unwanted rental
- Moving to assisted living
- Sudden relocation
- Retiring or downsizing
- Estate sales or inheritance
- Properties that need repairs
- Want to sell quick and avoid fees and paperwork
