By Katie Bassett


Homeowners in San Diego still believe they are feeling the aftermath of the 2008 recession, due to a scarce amount of homes available in the metropolitan. Truth is, while home inventory can be nerve-racking, promising indicators in San Diego real estate trends should have homeowners optimistic. First, it is important to assess the factors that affect the amount of homes on the market.


What effects housing inventory in San Diego?

  1. Wages and Inflation. Jobs and income have a direct correlation with San Diego’s housing inventory, and this metric has slowly been recovering since the recession in 2008. While the economy has been improving substantially since then, home prices continue to increase at a faster pace compared to wages and inflation rates, which effects the inventory of homes in San Diego. However, a complete recovery of jobs will take time, and like a domino effect, home sales volume will take off and peak in 2020. In San Diego, we are seeing a 2.3 percent increase in San Diego employment, increasing from 1,393,000 in January 2016 to 1,425,600 in January 2017.


  1. Mortgage Rates. High mortgage rates impact more than just home prices in San Diego, in fact, mortgage rates influence home purchase rates as well and usually in a negative way. When mortgage rates increase, purchasing rates tend to decrease, which signals lower inventory. Furthermore, mortgage rates heavily influence a prospects decision to rent vs. buy a home. A higher barrier to entry (i.e. increase mortgage rates) when buying a home, can push people to a renting option. However, rest assured, mortgage rates have slightly decreased nationally from 3.9 percent to 3.7 percent within the past year.  This is a telling sign that inventory and purchasing rates are bound to increase and you will see more prospects looking to buy versus rent a home in San Diego.


  1. Construction. Finally, increased construction rates are an obvious indicator of increasing home inventory. Numbers are looking up in San Diego, especially for those looking for a multi-family starter home. Below is a chart comparing single-family homes to multi-family homes constructed over the past three years. It is easy to see that multi-family home options have significantly grown, increasing home inventory for that specific home category.







Single Family Resident Construction




Multi-Family Resident Construction






A variety of housing indicators in San Diego suggest home inventory is well on its way to recovery. Although a slow progression, moderate recovery is occurring in San Diego for starter homes in particular while premium homes saw a decrease within the past year.  Posted by Dennis DeSouza on
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