As I did with Del Cerro, I wanted to take a moment to review the real estate market for San Carlos, San Diego, 92119 in 2022 (See Del Cerro 2022).  We only used single-family detached homes for this analysis. In 2022, there were 215 sales with an average price of $1,007,000.  The average sales price in Q1 of 2022 started high at $1,070,844, peaked in Q2 at $1,074,352, and then went down the next two quarters to finish the year off with a low of $917,142 during Q4 of 2022 (a decrease of 17%).  When we look at the change in price per square foot, the decrease in prices was similar with Q1 having an average of $607/sf while Q4 had an average of $516/sf (an 18% decrease in value).  These were massive decreases for the San Carlos Real Estate market in 2022. The average days on the market for a home in San Carlos was still a healthy 18 days. The decrease in values for 2022 was mostly due to the interest rate hikes that the Fed introduced starting in May and continuing up until the end of the year. An increase in interest rates typically has an inverse relationship with home values.

As higher interest rates set in and become the new norm, what do you think will happen to the real estate market in 2023?