Rental property management in San Diego is following the national trend of rising house prices. According to the U.S. National Home Price Index, housing costs exploded across the country last year. Many individuals involved in Point Loma property management, Ocean Beach San Diego property management, and other San Diego communities have taken note of these surging prices. Consequently, their own approach to rental property management has been influenced to increase monthly rental costs, so as to stay in line with national trends. The net result of all this is that the home prices rising faster.
So why the surge in home costs?
Industry experts consider that market changes are being driven by a high number of Americans relocating during the pandemic. This caused inventory of available housing to dip to record lows in the month of December 2021. When considered with the strong demand for housing, this caused prices to soar. Making matters even worse, construction companies have had difficulty keeping up with demand because of interference from the pandemic. That means it could be a number of years before the pace of construction is able to satisfy demand.
The areas of the country which have been most affected by rising home prices are the Deep South and the Southeast. Both of these areas have seen home prices increased by more than 25%. In addition, most of the big cities of this country have seen dramatic growth over the last several years. All 20 of the cities listed in the National Home Price Index are experiencing record-breaking demand for housing. The city which has shown the most explosive growth is Phoenix Arizona, with housing costs increasing by 32.5%. Tampa, Florida is not far behind with a 29.4% increase, and Miami is slightly behind Tampa at a 27.6% increase.
Shifting markets in sight?
The biggest increases on a monthly basis from last year occurred in August, 2021, at 19.8% for the month. By the time December rolled around, that had slowed to 18.8%. Gains were mostly steady for the remainder of the year, and are anticipated to rise more slowly in 2022. It is possible that mortgage rates may have an impact that causes a lessening of housing demand. Since mortgage rates are rising, this could act as a brake on housing demand and increase the inventory of available housing.
Most of the increase in mortgage rates has occurred late in 2021 and early in the present year. These increasing mortgage rates add significantly to the cost of a home sale and that will affect the affordability of housing. It is now estimated that the current housing market is nearly 6 million homes behind the demand for new homes.
It is possible that a competitive labor market and workplace flexibility may allow Americans to be more competitive in the housing market. Most economists and housing industry experts are forecasting that the demand for housing will decrease throughout the remainder of this year, and that may serve to lower home prices. However, for the time being, anyone considering purchasing a new home will be faced with the carryover of the soaring prices from last year and earlier this year.