San Diego Condo Market Forecast for 2006

Overall home sales in California are expected to be 2% less in 2006 compared to 2005, while home prices are expected to rise at a 10% average and mortgage rates to be around 6.4% for a 30 Year-Fixed mortgage. The housing affordability is expected to be at a low 15% for California.

What does this mean for San Diego home and condo buyers and sellers along? While homes in San Diego will stay longer on the market than they had during the last 3 years, prices in most areas, especially coastal will keep rising. Higher home prices compined with higher interest rates will lower the housing affortability in San Diego to about 7%.

The sales in San Diego condos will increase as first time home buyers would turn to the condo market since higher priced single-family homes would be hard to afford. Another reason that the condo sales will increase during 2006 is that retiring baby boomers wanting to increase their quality of life would seek the condo alternative.