At the end of every year, we always get a lot of questions about what we can expect from the San Diego real estate market in the coming year. It’s something that is not too hard to predict, and with a bit of research, you can always get a handle on what will happen with home prices, the market and more.

One of the best tools you can use to check on current home prices is the MLS San Diego. It keeps track of houses that are being sold all throughout the San Diego area. It won’t predict what home prices will be in the coming months, but that’s our job as the real estate experts.

And now that it's 2016, we have formulated some educated predictions as to what you can expect from San Diego real estate in 2016.

Fact: The Federal Reserve is Hiking Interest Rates

For the first time since 2006, the Federal Reserve is hiking short-term interest rates. The quarter of a point hike is going to be combined with further hikes in the coming years, meaning that the housing market will be affected by the move for years to come.

Prediction: It Won’t Affect Buyers Very Much

Although the housing market has benefited from low interest rates for the past few years, the interest rate hike isn’t likely to deter buyers in 2016. Home sales across the country are still predicted to increase from 5.4 million in 2015 to 5.7 million in 2016.

Although higher rates mean higher monthly mortgages for homeowners, the small increase is not expected to deter buyers too substantially. Job gains are still fairly strong and should bring new buyers into the market over the course of the year.

Fact: Home Prices Rose in 2015

According to the California Association of Realtors (CAR), home prices in California rose by 6.5 percent over the course of 2015, even though growth in the month of November was called sluggish. In San Diego, home prices rose mostly across the board, but the supply of houses on the market was lower than usual.

Prediction: Home Prices and Sales Will Continue to Rise in 2016

All in all, home prices are expected to rise by 3.2 percent in 2016, according to CAR, with sales also increasing by 6.3 percent over the course of the year.  Although the growth of home prices is decreasing, there are still gains to be made in sales, and there should be an increase on the amount of houses on the market, at least in the first half of 2016.

Advice From the Experts

 2016 will still be a great time to sell a house and to get into the real estate game. Gains are being made across the board, meaning it still pays to invest in property, and the low number of houses on the market right now is good for people looking to sell. If you are looking to do either, or just need some advice about the 2016 market, call or email Metro San Diego Realty today.

Posted by Jason Coriano on
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