As we look into the California and San Diego real estate markets for 2023, a few key trends can be noted. Prices have shown fluctuation throughout the year, with a small dip in December. However, even with this slight decrease, 2023 ended with a 6.4% increase in median home prices compared to 2022. This indicates that although there were some signs of cooling towards the end of the year, overall house prices are still on the rise.
Regional variations are also noteworthy. While some areas like San Francisco and San Jose experienced price softening, others such as Sacramento and Fresno continued to see growth in their property prices.
When we look at sales volume throughout the state, we do see a significant decline of 24.8% compared to 2022. This is quite considerable but not surprising considering rising house prices and economic fluctuations.
Seasonality needs to be taken into consideration too when interpreting these figures. December showed a flat number of sales when compared to November, hinting at possible stabilization. Nevertheless, the number was still 7.1% down compared to December 2022, indicating that we are still below previous levels in terms of home sales.
Another factor impacting the real estate market is inventory. The number of houses available for sale remains low, which contributes to the continued upward pressure on prices. This lack of supply paired with sustained demand can lead to a competitive market, often resulting in higher closing prices.
Interest rates also play a huge role in the real estate market’s dynamics. Throughout 2023, rising mortgage rates have undeniably impacted affordability for many potential buyers. This is likely one of the contributing factors to the decrease in sales volume we’ve seen this year. However, with recent dips in these rates, we might see some hesitant buyers encouraged back into the market.
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