To make sure we provide information you are interested in, when you're interested in it, if there are stretches of
updates you don't open, we'll automatically decrease the frequency of the updates you receive. If you like the updates,
you just need to open them to keep receiving them.
You already have a saved search with that name. If you save, you will overwrite the existing saved search. Are you sure?
End of 2017 San Diego Real Estate Market Stats & How The New Tax Reform Affects Home Owners
February 1, 2018 | Bobby Martins
This is going to be the year-end recap of the real estate market here in San Diego County, I’ll also share the most recent tax reform that was done, how this affects you as a homeowner, and what changes you are in for. First, we definitely want to thank all of our friends and family for helping us out in 2017 with the repeat business and referrals. We really, really thrive on your referrals so please keep them coming. For every referral you give us that turns into a closed transaction, you get put into a drawing for a $2,500 prize at our yearly Client Appreciation Party.
We've got a lot of fun things in store for 2018, and we really hope you will help us grow by keeping your eyes and ears open for people that you know are looking to buy and sell. It's a very interesting market in San Diego. You got 20,000+ agents in town, and so you want to make sure whoever you're working with as your realtor is really in it for your best interests, and we truly are. We hope you enjoy the information that we're about to provide. I think you'll find it very helpful. Without further ado, here are the stats for 2017.
If you look here, we're looking at the last year and the median prices of homes are up 8.9%. Obviously it's getting more and more expensive to buy a home, but if you notice, it's not 20% or 25% gains like we saw back in 2002 through 2005 or '06 so I think these gains are sustainable. We should see another positive gain this year. Most experts are predicting gains over the next couple of years. The average price now is $539,000 in San Diego County. If you look at the last 10 years, it's kind of interesting. Here all the way back in 2007, it was at $472,000. That's not that big of a difference in the average median price of a home. I know we do have an affordability issue here in San Diego, but there are still affordable homes out there. Renting is just not a smart thing to do long-term financially. It's really important to look at buying a home as an option instead of renting.
Market time really shows that it is a sellers’ market right now. All the way back 10 years ago it was 79 days on the market. Right now it's about 36 days on the market on average. If a home is priced to sell, it usually will sell within the first two weeks on the market. These numbers are skewed a little bit because you have some homeowners putting their houses on the market at much higher prices than they should, and then they're not selling. Not all sellers out there are motivated. Some are testing the market, although it is a much smaller number than most. That's something to look at.
Let's look at pending sales over the last year. Right now pending sales are down about 2%, and sales in general have been down as well. Listings sold are down 11% (2,600 units less) in 2017 than the year before. What does that mean? As a homeowner it means nothing. All that means is there's less homeowners putting their houses on the market. Obviously realtors don't love it because that means less sales. It's definitely a hot market and it's easier to sell properties. However, it is still not easy to sell them at top dollar. There's really an important formula that you have to follow when you're listing a property. You don't just put it out there and then sell it for top dollar. There are some things that you have to do because buyers are extremely picky in this market. It is not 2005 or 2006 where you have people basically willing to do just about anything to get into the market.
Now, this one is a graph of the interest rates all the way back to 1971. When you look at this, it just shows you how low rates have been for us recently. If you're waiting for rates to come down further, I wouldn't be waiting any longer. If you're waiting for prices to crash, I don't think that's going to happen anytime soon at least for the next couple of years unless we see interest rates go up dramatically over that time, but I don't believe that's going to happen because so many people are putting money into the treasury bonds market and so that is keeping rates low. Instability in the world keeps rates low. Obviously I don't think that's changing anytime soon. In general, mortgage rates are in the high threes and low fours. You got to take a long hard look at that because that is important.
Now, let's look at the tax reform bill that was just signed. With this one, there's some pros and cons. Obviously since the tax rate is going to be less, people should be walking away with more money in their pocket after doing their taxes. But some people are going to be losers in this tax bill. Let's look at some of the losers and look at some of the changes. For starters, if you own a vacation home, that's no longer tax deductible. That's definitely a big bummer. Furthermore, property, state and local tax has a new $10,000 limit. I know this one is going to make it very difficult for some people because here in California we pay such high state taxes on income tax. That's a tough one to lose. Mortgage interest deduction: This is one is a big one. Unfortunately, it's going from $1 million to $750k, which is definitely not helpful. However, if you bought before the 15th, you are grandfathered in. I had a client squeak in on the 14th of December so they are extremely happy. Then, this is a big one. Single filers are still staying at $250,000 tax-free money when you sell. You still only have to live in the house two out of the last five years. This was changed at the last second, and I think one of the biggest positives outcomes of this bill. It was really a huge thing that they kept this the same.
I do a lot of move up and move down purchases with my clients and so a lot of my clients rely on being able to sell every two or three years so that they can flip properties until they get into their dream home. Sometimes you have to flip two or three of those and by making it five out of the last eight years, that would have made it very difficult for a lot of people to do that. That's it as far as tax reform. Talk to your tax professional if you have questions. Obviously, we're here to help you as far as any of your planning needs for 2018. This is going to be a great year. There's a lot of opportunities coming on the market every single day. Don't let anybody tell you that you can't do something in this market. It can be done. We help clients every single day find great opportunities. If you're in a house that is no longer fitting your needs, you really have to look at what you're going to do for the long haul. My family, we got settled into our dream home this past year in 2017, and I can't tell you the feeling that of ... It feels so good to know that we're set for 10-plus years. We don't have to move. We've got a great low-interest rate at 3.75 on a 30-year fix. These things are important. For long-term economic stability, home ownership has always proved to be a smart thing. We're here for you. If you need help, please reach out. It's free of charge to talk to us. If you're looking to buy, it's free to work with us. It's really a no-brainer to have someone in your corner that can help you. I've been doing this 15 years, and my main specialty is getting offers accepted. If you are looking, we want to help you. Thanks so much and give us a call. We'd be happy to help you.