San Diego Monthly Market Overview

July 27, 2021 | Sundae Investor Team

The Sundae Monthly Market Overview provides local insight into known flipper purchases.

June 2021

Most markets go through periods of high and low activity, from the intense spring to the quieter winter and summer months. Real estate is no different. Real estate investors become more active in late fall, especially those planning to put a house on the market in the spring.  They need to add and list properties by the time home buyers — especially families —  look to move between the end and start of a new school year. The peak month for real estate rehab purchases has always been January. The seasonal patterns in real estate markets, like many other things, were disrupted by the COVID-19 pandemic.  Record-breaking sales volumes reported immediately after the pandemic made it clear that homes are more valuable for sheltering in place. Even in months that traditionally see fewer transactions, like December, home sales broke records after the lockdowns were lifted. May numbers confirm that seasonality trends are reverting back to their formerly consistent patterns as activity moderates.  We expect the purchase activity by investors intending to rehab and flip to continue declining or flatlining for the remainder of the summer and start picking back up in October.

Flipper Purchases by Month

These are purchases by known rehab investors who have resold within 12 months at a profit. Individual data points are volatile, so look for trends over the course of months. 

San Diego Flipper Purchases by Month

Percentage of Flipper Purchases of Total Home Sales 

Increasing and decreasing percentage of rehab purchases by investors reflects market exuberance or fatigue — respectively — and is a leading indicator of price expectations.

San Diego Percentage of Flipper Purchases of Total Home Sales

Flipper Purchases by Price Range 

Percentage of purchases within price segments reflects both market price movements and owner occupant preferences.

San Diego Flipped Properties by Price Range

Flipped Properties by Property Type 

Property mix pool of purchases is impacted by what comes on the market, but also potential for a property to be used or rezoned as a multi-family home or ADU. Legislative emphasis on increasing housing supply and zoning changes will be factors in how this develops. 

San Diego Flipped Properties by Property Type

Flipped Properties by Square Footage

Lifestyle, generational preferences, and major events like the pandemic can impact what buyers and sellers want, and boots-on-the-ground rehab investors are the first to notice the trends. 

San Diego Flipped Properties by Square Footage

Sundae uses public sales data to analyze transactions and defines flippers as investors who bought and resold a property within 1 year without forming an LLC. Due to the increased number of activity and in-person office closures, clerk-recorders offices experienced delays, therefore; some data is experiencing a lag. 

May 2021

The California real estate market continues to set records.

Purchases by known flippers in April totaled 222 in the San Diego market and represented 4.86% of all home sales during the month. After a dip in popularity, condos bounced back to historical normal — around 20% of all rehab investor purchases. Entry-level houses between 1,000- and 1,500-square feet remain the most popular, but property size doesn’t correlate to a significant trend change at this point. Sales growth is more robust in higher price segments due to strong appreciation, with homes selling above $800k-plus growing from 3.7% of all transactions to 24.79% of all transactions in only a year.

With mortgage rates still near historic lows and buyers’ interest remaining high, the California housing market posted the highest annual increase since 2013. Most regions within California set records as well. The Los Angeles Metro Area had a year-over-year price gain of 32% with median price reaching $725,000. Inland Empire appreciated 28% to post $500,000, meanwhile, most notably in San Diego and Sacramento, inventory continued to tighten. San Diego metro and Sacramento inventory continued to tighten. 

A year ago supply was at 3.5 months, now it’s down to 1.6. The share of overall investor sales has increased, partially due to more aggressive underwriting and partially to sellers feeling more comfortable letting people in their homes. Rehab investors will continue to enjoy high profits as new construction is mostly sold out.

Here’s a closer look at the market in San Diego.

Flipper Purchases by Month

These are purchases by known rehab investors who have resold within 12 months at a profit. Individual data points are volatile, so look for trends over the course of months. 

San Diego Flipper Purchases by Month

 

Percentage of Flipper Purchases of Total Home Sales 

Increasing and decreasing percentage of rehab purchases by investors reflects market exuberance or fatigue — respectively — and is a leading indicator of price expectations.

San Diego Percentage of Flipper Purchases of Total Home Sales

 

Flipper Purchases by Price Range 

Percentage of purchases within price segments reflects both market price movements and owner occupant preferences.

San Diego Flipped Properties by Price Range

 

Flipped Properties by Property Type 

Property mix pool of purchases is impacted by what comes on the market, but also potential for a property to be used or rezoned as a multi-family home or ADU. Legislative emphasis on increasing housing supply and zoning changes will be factors in how this develops. 

San Diego Flipped Properties by Property Type

 

Flipped Properties by Square Footage

Lifestyle, generational preferences, and major events like the pandemic can impact what buyers and sellers want, and boots-on-the-ground rehab investors are the first to notice the trends. 

San Diego Flipped Properties by Square Footage

Sundae uses public sales data to analyze transactions and defines flippers as investors who bought and resold a property within 1 year. Due to the increased number of activity and in-person office closures, clerk-recorders offices experienced delays, therefore; some data is experiencing a lag. 

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