Where do you think the real estate market is headed? (San Diego: short sales, foreclosures)

[sdchargers]

Hi everyone,

I am thinking about purchasing a home in San Diego in the future. I am not in a hurry either and don't mind renting a place in the meantime in order to save up a little more and have some cash to go towards renovation possibly or even just having a large emergency savings account.

I basically am thinking about purchasing a home anytime between 2012 and 2018 in the San Diego area.

Do you think the real estate market will keep going down for a little more. how about interest rates? When is the best time to purchase a home in San Diego in your opinion.

I am looking at places in Rancho Penasquitos, Poway, Encinitas/Leucadia, Clairemont and even the safe parts of Chula Vista (could get a good bargain there).

Thanks a lot!

[Mugsy]

For the area you are looking at try this Realtor Blog:

bubbleinfo.com | An insider's guide to North San Diego County Real Estate | Klinge Realty Blog by Jim Klinge

I live in Southbay. We bought a bit high but in this area, prices are kind of stable but low.

I also track Mission Valley.

All I can comment on is that condos can lose much more value than houses.

If you are buying, try to get into a SFR versus a condo. But it does depend on the area and HOA too.

[Oerdin]

The real estate market is going to be more or less flat for the next 5-10 years. That's usually what happens when a bubble bursts and we definitely had a real estate bubble here worse then most of the rest of the country.

[Mugsy]

However, compared to Detroit, we have alot more going for us weather and job wise. Where I work, they had 7 people retire recently.

Those Union Jobs were filled up quick,but my company is always hiring here in San Diego. There is always some type of job opening.

[Oerdin]

What sort of business are you in, Mugsy? I'm curious what fields are currently hiring here in San Diego because we seem to get asked that question a lot on this forum by people who are thinking about moving here.

[shmoov_groovzsd]

sdchargers,

We are in an extreme micro real estate market right now, especially here in San Diego. So conventional wisdom and CNBC Euphoria need not apply right now. Lets just say prices may tilt south a bit, but its really only due to sellers not selling and the market prices being heavily influenced by distressed sales, short sales and crappy inventory.
For anyone brave enough to sell their home right now, they have to be very somewhat aggressive and make it show really well to get a decent price for it.

Interest rates are mostly determined by long term Treasury Bonds and their yields. As we keep printing money and have a debt ceiling that is too low, this will affect interest rates at some point in the future and I think they will jump sharply. I really think we will see more direct changes to interest rates once we start growing, thus this MAY offset any values and keep them from rising too fast, but it will be a a rather small percentage methinks.

If I were you, keep watching the prices and getting to know more about specific zip codes you like as mentioned in your post. Those areas, I doubt will see a tide of change in prices as they are somewhat more desirable than say some other parts if SD.

[DJean Becker]

I browse the San Diego MLS most mornings and I publish a “daily deals” newsletter. And again this morning there are some amazing, simply amazing deals... I focus on 2-4 units. 2 of the 4 of these are conventional sales with profits at purchase NOT foreclosures or REO's. My point is .. IF you are in it for the long term (not trying to flip), this is a wonderful market to buy your HOME or your investment. It’s simply a VERY VERY different market than what we had 4-10 years ago. It’s not a bad market, just different. I also know, from several of my clients who are struggling to keep their home, that several lenders are actually reaching OUT to home owners about the mortgage affordability program, offering to temporarily reduce mortgage payments ( in exchange for extending the actual mortgage) or temporarily reducing the interest rate. To me these are signs of increasing stability. Not saying we are out of the woods but these are very good signs. So sdchargeres... is there a reason to wait actually? If you aren't trying to flip and intend to stay for some time.. there are great deals and homes to be had

[UrbanDecay]

I think it's going down all the way to Chinatown.

[PharmboyinNC]

My wife and I have been monitoring SD prices for 2 years, started to put offers in the beginning of the year and believe the prices are going down. We've seen it in the short sales: Buyer 1 puts in an offer, waits, withdraws due to another offer or frustration, the house goes back on market, sold at lower price than buyer 1's offer. Only reason why we know this is because we monitor the short sales we bid on, to see where it goes and have our agent follow-up if the initial buyer walks.

In my mind, most of the property prices in north county are still inflated, but micro-environments (neighborhoods/locations) strongly influence sales. We've seen houses across from each other sell at $100k differences due to renovations or if one is closer to a major road.

We decided to purchase a house and are in escrow due to a number of reasons, with the knowledge that prices will go down:
Interest rates are below 5%. Nobody can predict rates, but I have a feeling they will still be low to this winter. There has been thought about the treasury doing things that could increase the rates, but if you look at historical events, it just caused slight fluctuations.

There are a lot of congressional oversight on how banks and real estate is handled. Whatever changes/buyer protection occurs will cause changes=increased costs to the banks that will trickle down to increased mortgage closing costs (banks are like casinos, they always win).

We have relocation funds that expire the end of the year, but prefer not want to wait for the winter season and move during the holidays. Plus nobody knows what's in the market. We pulled the trigger by going after properties that fit our needs/location, had lowest prices vs nearby comps, and capable of 20% down.

Just remember that everyone has their opinions on this and I am not trying to push anyone to do anything. If it wasn't for our relocation benefit deadline, I'd wait and watch...

[shmoov_groovzsd]

I am still waiting to see if and who will publish the percentage of buyers in that market that are putting a min 20% down for homes priced at 500k and higher. I will bet its in the single digits.
This is an FHA/first time home buyer driven by market by far sprinkled with a little 100% cash.