2021 Q1 – Up, Up and Away!

Here’s the stats from the 1st quarter of 2021 in San Diego real estate, along with predictions for the rest of 2021.   Always hand-written with stats direct from our local MLS.  

2021 Q1 Summary

Sales Volume Seasonally Up: Down 23% from Q4 2020.  Up 17% from Q1 2020
Inventory Record Low!:
Down 26% from end of Q4 2020. Down 49% from Q1 2020
Loan Rates Up a bit: Started at  2.76%, went up steadily to %3.22
Home Values Up: Median sales price Up 18% over Q1 2020
Govt./Policy Changes: Covid-19 Stimulus & Biden’s Market


The Above image is a visual summary of my statistics reference from our local San Diego Association of Realtors.

Click here to View Full Stats from San Diego Association of Realtors

2021 Q1 – The Details

Sales Volume:
Sales Volume (# of total sales) is not that high this quarter compared to other times of the year, but proportional to the inventory, it is. Seasonally speaking, we had more sales in Q1 of this year than last year, despite there being far less inventory to buy this year. It’s seasonally normal for January & February to be slow on sales, but the pendings really picked up in February and closed sales were pretty high in March as a result. With Pendings even higher in March, we are expecting a big month in April.


Inventory has been trending down for about 2 years, and the last year especially has been extremely low. It’s common for inventory to hit it’s seasonal low at the end of the year and this year was no exception. However, we normally see new listings rising and inventory rising into the summer, but instead, we have seen inventory decrease in the first quarter hitting record lows!

New listings are down almost 12% over Q1 2020.  Will the rise in prices initiate more folks to sell off their assets and move? Are more people moving here than there are homes for?  Seems like there is an overall housing shortage in San Diego…. Perhaps the eviction moratorium and Covid fears have kept some listings off market, but I tend to think our issue is larger than that.  We need to start building more (affordable) housing. Realistically, that housing needs to be denser urban infill where services already exist.  The new ADU laws are trying to create more infill developments, but it’s not enough apparently…

Loan Rates:

Rates have been on the decline for almost 2 years now, which is one of the biggest fuels to our home price fire. Low rates brought better affordability until recently as both prices and rates are on the rise. Rates hit just about rock bottom at the end of 2020. I had folks getting qualified for rates well under 3%.  Rates climbed back up a tad bit this year, but they are still very very low. 

My lender is expecting rates to stay somewhat level and/or rise a bit this year. Perhaps that is another reason folks are scratching and clawing to buy right now, while rates remain low….

Home loan rate charts:

Long Term Rate Chart: 1971 – 2021                               Short Term Rate Chart: 2021 Q1




Govt / Policy Changes:

The biggest news of the quarter IMO is the Biden $2trillion stimulus plan. The wave of buyer demand that has ripped across San Diego, and I’m told most of the country, has to be due in part to that massive injection of money into the economy. 

In addition to the new Stimulus plan, The fed has kept the Federal Funds rate next to Zero for about a year now. This increased liquidity in the markets has certainly helped the economy overall, which increases buyer demand. 

Home Values:

Median home values  are up 20% year over year right now for detached homes. I think that April’s % increase over 2020 will be even higher. There’s no doubt home values have gone up at a solid clip for the last year and they have accelerated very recently at the end of Q1.  With Inventory at 50% and demand fueled by stimulus money, low rates and a renewed desire to own in this post-covid world, the supply/demand curve is pointing one way…..home values are going up right now. 


What does the future hold? My theories & predictions are below…

Of course, these are just predictions….that said…we are going through a very quick bump in prices that has been going on for about a month. It’s mid-April as I’m writing this and I’m seeing every decent home going 5-10% over list price, so I’m quite sure that Q2 is going to see a solid rise in home values.

The real question everyone active in the market right now is asking is, “When will this stop? And then what?”

Median prices went up 8% in February & March alone. I’m expecting another 7-12% in Q2.  I think that Q3 will see a leveling out and Q4 a very small pullback of like 1-2%. After that, I hope we return to some fashion of normality, but what is that going to be anyways??

It doesn’t seem like people are moving out of San Diego any more than they are moving in. With the rise of work from home options, we are getting overflow from San Francisco, LA and other expensive areas of California that prefer the San Diego weather & lifestyle (and cheaper prices). With people putting a premium on outdoor life during Covid, San Diego is in high demand. Will that trend continue?  I tend to think so. I think the market in 2022 will be more flat, but that depends on how high we go this year. If we go up over 20% this year, then we are more likely to see a pullback IMO. And unfortunately, I don’t think Covid/airborne virus’ will just go away in 3-6 months and never return, so I also see more of a shift towards detached homes with yards and less demand in urban/denser areas or condos. But the over-riding trend is that there is an overall housing shortage….the rental market is just as tight. Thus, with supply at all-time lows, long-term prospects for San Diego real estate are still high IMO, despite the fact that we are hitting new peaks right now.

Want a free lunch?
If you got this far and read my entire article, please let me know what you think with an email/text/call. You’ve got a free lunch coming to you!

And thank you for your referrals – they are the foundation of my business at over 90% the last 5 years.

Adam Pascu
Broker / Owner
73 Degrees Realty

ps. feel free to check out my San Diego Green Homes site if you have a passion for living green/sustainably and contact me (cell: 858-761-1707) for a free consult regarding how to green your home.