SAN DIEGO (KGTV) — The Federal Reserve's decision to raise interest rates has many wondering if San Diego's sky-high housing prices will finally come down, but analysts say the Fed's move can only do so much in our supply-strained county.
"I get text messages, I get emails, I get calls," said Loan Officer Mark Goldman, of C2 Financial.
"Not only do I get them for my private residence, but I also get calls because my company has the name realty in it."
Goldman says San Diego's housing market is out of balance with extremely low supply and very high demand. For instance, one of his clients was recently outbid by a cash buyer who paid 40 percent above the asking price.
As it stands, CoreLogic says home prices in San Diego County grew 15 percent in the last year to a median of $775,000. Prices are further pushed up because interest rates are historically low, giving people more buying power.
The Federal Reserve, however, started raising them last month -- with plans to do so six more times by year's end. The average rate for a 30-year-fixed mortgage is now 4.17 percent, according to Freddie Mac. That's up from 3.08 percent a year ago.
In most markets, the rate hikes would cool prices because people can't qualify for as big of a mortgage. But Goldman says San Diego is different.
"Even though some people might be put out of a particular neighborhood price-wise because of the higher rates, there are still more buyers than there are sellers," said Goldman, adding that he does see the rate of appreciation slowing.
Still, he says even San Diegans without gobs of cash should get mortgage pre-approval and keep making offers.
"You get out there and you search, you get out there and you write a lot of offers until you get one that sticks," said Goldman.
He says things like a personal cover letter to a seller could be just enough to make the difference.