Covid has slowed the real estate market across the country, but housing prices have not dropped as much as predicted. The Escondido real estate market has fared well since the start of the pandemic. While Covid has halted some buyers from purchasing homes and signing new rental leases, the market is projected to bounce back within the next few years and rise long-term.
REAL ESTATE HAS MOVED VIRTUAL
Covid-19 restrictions made it hard for potential buyers and renters to tour homes in person, so the real estate market adjusted. Many sellers are now hosting virtual tours and conducting consultations and real estate sales over Zoom. Some sellers are still offering in-person showings, but recommended sanitation and safety precautions are utilized during the visit.
Despite the move to online and the uncertainty of Covid, the real estate market has not experienced a significant loss. A study by OJO Labs found that while 80% of would-be buyers have either delayed their housing search or stopped it all-together, many still are planning to buy. 30% of potential buyers reported looking at available listings more often than before their search was impacted by Covid.
The reason many potential buyers delayed their housing search is not surprising. 60% of those surveyed cited concerns over their future employment prospects and 54% said the inability to see homes in-person was a main reason for their hesitance to buy in the current market.
Contrarily, the study found that 20% of buyers reported actually expediting their home-buying timeline because of Covid. These buyers said low interest rates and the potential to get a good deal on a home were motivators.
CHANGE IN BUYER EXPECTATIONS
The study by OJO labs also found a change in buyer expectations for homes. Since Covid, buyers are putting more emphasis on common spaces like extra bedrooms, open floor plans, and kitchen styles. Criteria like a home office could be higher on the list of “wants” for buyers than before the pandemic as remote jobs have become more prevalent.
CURRENT HOME VALUES IN ESCONDIDO
While uncertainty from buyers has impacted real estate sales, the Escondido market is only predicted to fall -0.9% over the next year. The median home price is currently valued around $553,000. For comparison, Escondido home values rose roughly 5% in 2019.
Despite Covid, the percentage of foreclosures in Escondido is relatively low compared to other areas. 0.3% of homes are foreclosed (per 10,000) in Escondido, compared to the San Diego-Carlsbad Metro value of 0.5% and the national value of 1.2%.
Mortgage delinquency rates are low as well. This is when a homeowner fails to make a mortgage payment, and it is the first step towards foreclosure. The percent of delinquent mortgages in Escondido is 0.6%, which is lower than the national value of 1.1%.
PREDICTED MARKET TRENDS
Despite the current impact from Covid, housing market trends show Escondido will rebound with improved resiliency. Escondido’s median property value is predicted to experience a long-term increase. Over the next five years, the average home value is predicted to rise to $600,000, according to market forecasts by Wallet Investor. Property values are expected to increase by 8.5% in the next five years as well. By 2030, the median property value will be $649,000--a 17% increase. This makes Escondido a lucrative place for long-term property investments. The highest appreciating neighborhoods in Escondido since 2000 are N Midway Dr / E Lincoln Ave, Jesmond Dene, and Rock Springs Rd / Montiel Rd.
Demand for rental properties is expected to increase as well. Zillow’s market analysis predicts that over the next three years it will be more advantageous for people to rent, rather than buy, their home. Around half of Escondido residents are currently renting their living space. Single family homes are the most common property units in Escondido and account for 50% of the total housing market. Apartment complexes are also in high demand and make up 30% of the housing market in Escondido.
While Covid has slowed some buyers from purchasing homes, current projections show the real estate market in Escondido will rise long-term, making Escondido an ideal place to invest.