Carlsbad Real Estate Market Forecast 2023

Carlsbad, California, offers residents new and old with a wealth of opportunities when it comes to real estate. It has a storied history for buyers and sellers thanks to its uninterrupted coastline, top flight golf courses, and strong tourist-centric economy. In consequence, the Carlsbad real estate market often tops nationwide lists for its extremely desirable properties.

But that’s not all there is to know about the housing situation. Recent years have shaken up the traditional norms in the area. That’s why we’ve put together this comprehensive guide to living in Carlsbad in 2023.

Let’s begin our market forecast by touching base with trends and changes to the cost of living in the area, and signs that tell us more about the future of real estate in Carlsbad.

Carlsbad has shown enviable resilience in regards to its housing market. Home values are on the rise. They currently average about $1.35m in the city. The COVID-19 pandemic truly reshuffled the values of property in the U.S. — especially in California — but the cost of living has remained on par with its pre-pandemic numbers. Indeed, home values are increasing again and even surpassing figures that we saw in 2019.

Home values are rising partly because Carlsbad is an extremely competitive housing market that favors sellers at the moment. Home inventory is slightly down, so buyers are more likely to need to compete with their fellow buyers and settle for a higher list price. Overall, homes in Carlsbad have increased about 12% since 2022.

Just like it is across the majority of the U.S., interest rates on home mortgage loans are at a high point. The average interest rate in Carlsbad sits between 5.4% and 6.1% depending on your lender and payments. Compared to this time in 2022, these figures tell us that 30 year fixed loans are coming at a premium.

This trend can be somewhat discouraging for buyers with less savings. But buyers who have their eyes set on a luxury home in Carlsbad will likely not experience too much of a difference when it comes to securing a mortgage loan.

As of March 2023, the market for landlords in Carlsbad is somewhat suboptimal. More and more renters are migrating out of the state of California, while buyers who are looking to invest in luxury real estate are becoming more common.

Still, this trend isn’t the case across the board. Carlsbad is home to a number of high end condos that command high demand. Simply put, the rising property tax rates and insurance rates for renters makes it a great time to meet with an agent in the area who will be able to direct you to the right property for you.

Migration rates away from California are definitely at a high point. Many Carlsbad residents have lived in the area for generations, which contributes to a strong sense of community. Nevertheless, a healthy proportion of sellers are moving away from California.

Figures indicate that most Carlsbad residents are moving to cities like Las Vegas, Phoenix, Dallas, Nashville, and Miami. We see similar trajectories across the state. Where people do choose to move into Carlsbad, they frequently come from New York, Chicago, Washington, D.C., and neighboring Los Angeles.

A negative net population tells us also that high end property owners are more likely to stay since they can afford to live in California’s higher tax bracket. Lower earning Californians are more likely to move to other parts of the country.

The market in San Diego as a whole mirrors that of Carlsbad, but not as starkly. Home values are certainly up. But the rest of the county isn’t in such a seller’s market at Carlsbad, where luxury single family homes are common. That still means that San Diego is a prime place to invest. Carlsbad is simply the cream of the crop when it comes to home values in the county.

Coming from the historic highs we saw in median home prices in the late third and fourth quarter of 2022, prices have risen somewhat in the early months of 2023. The average today lies at about $1.35 million, up nearly 12% from this time last year.

This is an expected trend that real estate agents and experts have noticed all across the U.S. This slight upturn in sold prices is even more apparent when we look at towns and neighborhoods that have a large proportion of high-value properties like Carlsbad.

Looking specifically at homes with more than four bedrooms, we notice an even greater upswing in sold prices. In some areas of Carlsbad, prices for these houses have risen nearly 25%.

In our opinion, now is the time to invest in real estate in the Carlsbad housing market. As interest rates climb and the market favors sellers, the opportunity to get in on the ground floor in real estate gets slimmer. The inventory of homes in Southern California is stable or dropping, so it’s better not to wait at the moment.

Buying property to invest could be extremely prudent as long as the timing is right. Get in touch with a real estate agent today for more specific insights on the cost of living and the neighborhoods with the strongest market.

Closing up our market forecast for the Carlsbad housing market in 2023, we can offer the following points:

If you have any questions about the market in Carlsbad or if you’re ready to buy or sell a home, don’t hesitate to reach out to Cindy Mort for more information!