The Great Housing Market Paradox: Sales Are Slow, But Prices Keep Climbing
The national housing market is in a strange and paradoxical state. As a recent San Diego Union-Tribune article, "November homes sales rose from the previous month, but down from 2024," highlights, the volume of home sales remains sluggish, yet prices continue to reach new heights. This national trend is a mirror of what we are experiencing right here in San Diego, and it creates a confusing landscape for both buyers and sellers. Let’s break down what is really happening and what it means for you.
The latest report from the National Association of Realtors shows that existing home sales are stuck at a historically low pace, well below the pre-pandemic norm. At the same time, the national median sales price has hit an all-time high for November, marking 29 consecutive months of year-over-year price increases. This is the great paradox of the current market: low sales volume is not translating to lower prices. The reason is simple: a persistent and severe shortage of homes for sale. With inventory still well below what is needed for a balanced market, we are seeing intense competition for the few homes that are available, which continues to push prices upward.
One of the most concerning trends highlighted in the report is the struggle of first-time homebuyers. Historically, first-time buyers have made up about 40% of the market. Today, that number has fallen to just 30%, and a recent survey found that the average age of a first-time buyer has risen to a record high of 40. This is a clear sign that the dream of homeownership is becoming increasingly difficult to achieve for younger generations. In a high-cost market like San Diego, this challenge is even more pronounced. The combination of high prices, elevated mortgage rates, and the difficulty of saving for a down payment is creating a significant barrier to entry for many.
So, what is the practical advice for navigating this paradoxical market?
For Buyers: The current market requires patience, preparation, and a healthy dose of realism. While the competition is fierce, it is not impossible to succeed. The key is to be a well-qualified and attractive buyer. Get fully pre-approved for a mortgage, have your down payment ready, and be prepared to act quickly when you find the right home. It is also important to be flexible. You may need to consider a wider range of neighborhoods or be willing to purchase a home that needs a bit of work. The good news is that mortgage rates have stabilized in a more reasonable range, and with fewer buyers in the market, you may have more opportunities to negotiate. Do not be discouraged by the headlines. With the right strategy and a trusted advisor by your side, you can still find your place in San Diego.
For Sellers: In this market, you are in a strong position when it comes to price. The lack of inventory means that your home is a valuable commodity. However, this is not a market where you can simply name your price and expect a bidding war. Today’s buyers are discerning and financially savvy. They are not willing to overpay for a home that is not in top condition. To get the best price for your home, you need to make sure it shines. Invest in smart, cost-effective updates, stage your home to perfection, and price it strategically based on a thorough analysis of the current market. A well-presented, competitively priced home will still attract strong offers and sell quickly.
The housing market of 2025 is a complex and challenging one. It is a market of contradictions, where low sales and high prices coexist. But it is also a market of opportunity for those who are willing to be strategic, patient, and well-informed. Whether you are a buyer trying to break into the market or a seller looking to maximize your return, we are here to provide the expert guidance you need to succeed. Visit our website to learn more about how we can help you navigate this unique and evolving market.
This blog post is an analysis of the article "November homes sales rose from the previous month, but down from 2024" published by the San Diego Union-Tribune.