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SAN DIEGO — It’s a seller’s market in San Diego and it could be staying that way for a while according to experts. Even with interest rates on the rise, home and condo prices are likely not going to go down.
“You have this many buyers and you only have this many houses,” said Tina Balch.
Balch is a realtor with Big Block Realty and says San Diego is a market where people will do whatever it takes to buy a home.
“Right now we’re average 4.25 between 4.75 for a 30 year fix for a single family home, if you’re getting a condo, there’s a hit for a condo. It’s much more risky for a lender. Condo rates are higher we just locked a rate that’s almost 6%,” said Balch.
Today, the cost of a 30 year mortgage on a typical U.S. home is nearly 20 percent higher than it was just three months ago.
Experts say prices will likely continue to climb, especially in San Diego where there’s not enough homes for sale.
Economics and finance professor at University of California San Diego, Allan Timmerman says shocks to the economy, such as the pandemic and war in Ukraine, have caused inflation to soar.
“The fed is debating how to get in control with rampant inflation at 8.5%,” said Timmerman. He says the federal reserve is trying to mitigate the high inflation with higher interest rates.
“The fed might need to slam the brakes harder than they would like to because when they do there’s always a danger of the economy hitting a recessionary spell,” said Timmerman.
Even with if a recession were to happen, Balch says it is unlikely home prices will move.
Price cuts will only happen if a large number of people can no longer afford today’s prices, forcing sellers to adjust their expectations.
WATCH RELATED: Rent across San Diego County increases, up 82% for 3-bedroom unit in Encinitas (April 2022).
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