Sublime weather, gorgeous vistas, proximity to downtown San Diego, a vibrant, unforgettable spirit — the excellent traits Hillcrest possesses could go on ad infinitum. Known for its welcoming ethos and beautiful shops, taverns, and restaurants, the Southern California enclave is synonymous with a life well-lived.
If you live in the region and are weighing the notion of selling your residence in the next few years, you’re clearly onto the prevailing opinion that Hillcrest is one of the loveliest places to call home in the Golden State. Ditto if you are scouting out homes in the area to purchase in the coming months or years.
Whatever your circumstances, you probably know we’re in an evolving real estate market. Where the market goes could determine your ultimate decision. With this in mind, Nick Emerson of the Emerson Group has compiled this list of predictions for 2023 to assist you. Read on for a glimpse into what the future may hold.
Home prices will likely drop
There’s no doubt about it: We are entering a different real estate market. We found ourselves in a decidedly blazing-hot seller’s market in the last two years. Low inventory and increased demand caused home prices to skyrocket across the nation. In San Diego County alone, the median home price rose to nearly $750,000. And in late 2022, the average home price in Hillcrest exceeded $1 million, rendering it one of the priciest places in California and the U.S.
People were eager to buy homes and consistently sweetened their offers with waived contingencies. It became commonplace for homes in California to sell for $500,000 and above. It was inarguably a celebratory time for sellers and an exhilarating one for sellers who had the means to procure their California dream.
The adage that all good things must end now applies to sellers in the California housing market. For one thing, mortgage interest rates recently surpassed 7%. The cost of living continues to increase and spur worries for consumers. This has led to a dip in home prices that experts believe will continue in 2023.
How low prices will decline in 2023 (and possibly 2024) is undecided, but some experts think that hot markets may see home prices fall by as much as 30%. Other experts indicate home prices will continue to decline at a mere 10% as we move closer to 2024. And other, less fatalistic experts suggest the rate of decline could be much lower and may come in at around 5%.
Whether home prices in Hillcrest will fall this dramatically is uncertain, but one thing will persist: its highly desirable attributes will continue to attract interest.
Supply may increase
A substantial contributing factor to the projected reduction in home prices? An increase in supply, when before, many prospective buyers were working with exceedingly low inventory. By September 2022, listings in San Diego shot up by 45%.
Whether this will progress is unknown. Homeowners considering adding their property to the list of homes for sale in Hillcrest might hesitate before putting up the proverbial stake in their front yard. They, too, will be subjected to the same higher interest rates if they choose to purchase a new home simultaneously.
Buyers may have a unique opportunity
There is a great deal of shock and alarm about the “skyrocketing” interest rates. Still, experts interviewed by the New York Times confirm what many are thinking: 7% is not outrageous, particularly when we look back upon the 1980s (when some mortgage interest rates were more than 18%).
Many homebuyers are peering at what may change in the real estate market in 2023 and 2024 and deem it a superb opportunity to sweep in and buy. They can score a home at a lower price if the predictions come to fruition. And while they will have a higher interest rate than they would have obtained in 2020, they’re also getting a better deal. Further, they may be able to refinance their mortgage when interest rates drop again.
In other words, 2023 might be a suitable time to jump into the market if you are a hopeful buyer.
Sellers might have to step up
As we pointed out above, sellers were in a prime place in the last two years as bidding wars dominated and buyers practically begged for homeownership. As we ease into a cooler market, however, sellers may be expected to step back in negotiations — and step up in general. This may mean increased renovations to ensure their homes are in immaculate condition before they hit the market and accept concessions from buyers.
Buyers may be able to move at a more leisurely pace
The frenetic pace of the real estate market in the last two years meant buyers were moving swiftly to edge out their competition. The calmer market that may be afoot could change this. Homebuyers with their eyes on Hillcrest may be granted the gift of time to explore its wide offerings, including single-family dwellings, modern townhomes, and chic condominiums.
Working with a seasoned real estate agent will be vital
We are in a “wait and see” limbo as we watch the economy for signs that we’re moving into a genuine recession. With this arrives a lot of uncertainty in significant purchasing decisions — and few purchases are more substantial than real estate. Excellent real estate agents have one finger on the economy's pulse and another on the heartbeat of their local market, enabling them to offer wise counsel to their clients.
Nick Emerson has garnered a reputation for providing his clients with candid, sound guidance on the ideal time to buy and sell — and how. In addition to specializing in Hillcrest real estate, he has extensive experience in Mission Hills and surrounding areas. He would be happy to help you navigate what rests ahead in the immediate future and as we move into 2023. Reach out to him today for a consultation.
*Header photo courtesy of Nick Emerson
