There are concerns that lower pricing will cause recent home buyers to be underwater – and potentially create another bubble to pop. A factor to consider when assessing the current market conditions is how quickly the affluent buyers have taken over the marketplace between La Jolla and Carlsbad:
NSDCC Annual Detached-Home Sales
We’re not done with 2022 but there will only be another 80-100 sales to add to this year’s total.
- The recent buyers had to qualify for financing (if any), and with virtually all of them paying over $1,000,000, they are probably flush and not many will get spooked into selling.
- When only the rich can participate, we won’t be having as many sales – with hardly any opportunities for the regular folks who hope to buy under $1,000,000.
Yes, if pricing keep coming down, there will be more sales in the lower-priced categories. But how many more under $1,000,000 next year? Forty? 80? It’s very unlikely that we will get back to the 2021 number, let alone have hundreds of homes selling under $1,000,000.
Not only will the inventory be lower, but the closed sales will probably decline next year too.