For the last three or four years, it has unquestionably been a “buyer’s market” in Downtown San Diego Real Estate. Housing values have dropped 30-50% since 2007 and banks are lending at all-time low interest rates. New programs like FHA have made it easier than ever for first time home buyers to enter the Downtown San Diego Real Estate market, even with less than ideal credit and barely any down payment. Many homeowners that purchased before the “bubble” burst found themselves upside down in their mortgages and had to attempt a short-sale or even let the bank foreclose on the home completely. While those newly vacant homes were tougher for the lenders to finance for regular home buyers, Real Estate Investors saw the opportunity to get valuable inventory at fire sale prices and dove into the market head first. Conversely, the drop in home values encouraged potential sellers to hold on to their properties and began a slow suffocation of the inventory levels of available homes for sale.
Fast forward to February 2013, and what we’re left with is less than two months’ worth of inventory in Downtown San Diego alone, and less in other areas in San Diego County (a healthy market requires around six months). When homes do come on the market, they are quickly moved upon and now more than ever, you need to enlist the help of a seasoned Real Estate Professional to help you with the process. It’s not uncommon to see a house hit the market and receive multiple offers within the first week. These bidding wars are slowly causing the “low prices” that we’ve grown accustomed to over the last 5 years, to raise. In 2012 alone, equity in 92101 rose 13%, and is expected to raise at least that again in 2013. As each home closes, it sets a new comp and effectively “raises the bar” for the next deal. With no new inventory scheduled for Downtown San Diego until at least 2015, we don’t see any reason why this upward trend won’t continue. Bottom line, while the low interest rates and still (for now) low prices signal good buying conditions, it is no longer a “buyer’s market.” If you are still on the fence about purchasing your first home in Downtown San Diego, I’d recommend making the move soon.
Some steps to get started:
- Talk to a local real estate professional for advice specific to the neighborhood that you want to move into.
- Contact a loan representative for a pre-qualification to find out your purchasing power.
- Research you neighborhood’s most recent comps.