This week: Two weeks off and straight to the deep end – it’s time for our usual deep dive into the monthly numbers. 🙌

Weekly Snapshot

Dec. 31 to Jan. 6Prev 4 Week Avg.% ChangeDec. 24-30
New Listings47831411.69%178
New Pending Sales32650212.35%283
New Sales3395530.77%457
Active Inventory1,6851,7278.08%1,419
30 Year Fixed Mortgage3.22%3.10%0.81%3.11%

Rates climbed by 1/8 of a point since Christmas according to the posted rate from Freddie Mac last week.

Unfortunately, that 3.22% is old news. Rates continued to move A LOT higher since that rate was posted last Thursday. This is the fastest climb we’ve seen in a very long time. As of the time of this writing, the average 30-year fixed rate is at 3.64%.

With rates increasing like this, prospective buyers are getting antsy to lock them in before they go even higher. They’re coming out in full force right now.

With 1,600 homes on the market, if you’re lucky enough to be involved in any of those listings you know firsthand that the buyer frenzy is already starting.

If you are representing buyers and are looking for help in getting more offers accepted, check out THIS INCREDIBLY WELL-TIMED TRAINING from my good friend, rockstar agent, and team lead, John Gluch.

Detached (11-2021)Detached (11-2020)% ChangeAttached (11-2021)Attached (11-2020)% Change
New Listings1,6331,897-13.92% 8381,072-21.83%
New Pending1,9081,914-0.31%1,0001,069-6.45%
New Sales1,9102,177-12.26%1,0241,158-11.57%
Med. Price$860,000$750,00014.67%$595,000$475,00025.13%
% Orig List Price 101.3%100.2%1.1%102.1%99.4%2.72%
Mo. Supply 0.61.2-50%0.51.5-66.67%
Avg DOM24240%2125-16%
Affordability4553-15.09% 6583-21.69%
30 Yr Fixed3.07%2.77%10.82%

The % to list price metric jumped back up in December which is definitely outside of the normal yearly trend. If you needed another sign that Q1 is going to be 🔥 HOT HOT HOT 🔥 for sellers, there ya go.

We finished the calendar year of 2021 at a year-over-year appreciation rate of 14.5% for detached homes and 17.8% for attached.

As a result, affordability dropped 20% for the year. That number will continue to drop as interest rate increases start to hit these monthly calculations.

In The News
  • Let’s all balk in jealous envy at the most expensive San Diego homes sold in 2021.
  • Cash home sales hit their highest level in 7 years.
  • Upfront fees for high balance and second home loans are going to increase on April 1.
The Week Ahead
  • The biggest event on the docket this week is the inflation measure consumer price index (CPI) that drops on Wednesday. Considering the Fed’s response to inflation is what is causing the run-up for mortgage rates, anything related to inflation is a big deal right now. If the release shows the inflation surge is slowing down on its own we could see a rebound for mortgage rates later this week. If the release is worse than expected…well then it could get ugly.

Looking Ahead

The San Diego real estate market is influenced primarily by three variables right now:

  1. Housing supply
  2. Mortgage rates
  3. Local job market (employment and wages)

Every month I touch on each one to see how we’re doing using labels. GREEN means upward pressure on prices, YELLOW means even pressure, and RED means downward pressure.

Housing Supply – VERY GREEN
We’ve never started the year with less available inventory for sale. And with interest rates rising, move-up buyers are going to have reason to second-guess that decision which will restrict inventory even further.

Mortgage Rates – YELLOW
Rates are spiking hard and fast. If it continues at this pace for another month this indicator will turn RED. This is the one variable that can move quickly enough and impact affordability enough to change the market environment on a dime.

Jobs – GREEN
The Great Resignation is real. Employees have more power today than they’ve had in decades.

On a national level, the U.S. added 199,000 jobs in December, far below expectations of 422,000. But on the flip side, the unemployment rate declined more than expected, to 3.9% from 4.2% in November, and wages increased 4.7% year over year.

On a local level, The unemployment rate in San Diego County was 4.6 percent in November 2021, down from a revised 5.3 percent in October 2021, and below the year-ago estimate of 6.8 percent.


The bidding wars have already started. I expect fast and furious price gains in Q1 similar to last year.

The affordability crisis has eliminated a lot of buyers from being able to afford to buy a home…meaning even though we have crazy low inventory, the pool of prospective buyers is a lot smaller than in times past, meaning the market can sustain less inventory than it used to before we start to see a supply and demand shift.

I’m confident prices will end up higher by the end of the year, but with rates on the rise, I expect the increase to be less than what we saw in 2021.