Buying a house in San Diego (should I buy now or wait a bit) (San Marcos: mortgage, refinance)

[Shaarkan]

Hi everyone,

I have been looking at moving to San Diego since last fall. I was about to buy a house sight unseen back in November in San Marcos, but decided I probably shouldn’t do that since I’ve never even been in San Marcos. Glad I waited, because after visiting San Marcos I know that’s not where I want to live. We decided to move to San Diego short term and look at different neighborhoods we want to live in. We moved to Rancho Penasquitos in January, and really like it here. We have been looking at buying a house here. But it seems like since the fall the housing prices have increased 10%! The bidding wars are out of control! We saw a house listed for 1.2 and it ended up selling for 1.478!
I’m trying to decide whether We should buy now or wait awhile. Maybe the prices will at least level out? I don’t know the San Diego housing market at all. Would love to hear some insight from anyone!

[Racer46]

Originally Posted by Shaarkan

Hi everyone,

I have been looking at moving to San Diego since last fall. I was about to buy a house sight unseen back in November in San Marcos, but decided I probably shouldn’t do that since I’ve never even been in San Marcos. Glad I waited, because after visiting San Marcos I know that’s not where I want to live. We decided to move to San Diego short term and look at different neighborhoods we want to live in. We moved to Rancho Penasquitos in January, and really like it here. We have been looking at buying a house here. But it seems like since the fall the housing prices have increased 10%! The bidding wars are out of control! We saw a house listed for 1.2 and it ended up selling for 1.478!
I’m trying to decide whether We should buy now or wait awhile. Maybe the prices will at least level out? I don’t know the San Diego housing market at all. Would love to hear some insight from anyone!

Unlikely to drop unless something major happens. Investment groups, including foreign ones and foreign buyers are part of what keeps the prices rising. Then work from home employees are leaving real expensive places in CA for the better weather of SDC and buying. The demand exceeds to supply and will for a long time. People have been posting here for years about a bust coming and ... the prices are rising even faster than when those posts were made.

[roadwarrior101]

Originally Posted by Shaarkan

Hi everyone,

I have been looking at moving to San Diego since last fall. I was about to buy a house sight unseen back in November in San Marcos, but decided I probably shouldn’t do that since I’ve never even been in San Marcos. Glad I waited, because after visiting San Marcos I know that’s not where I want to live. We decided to move to San Diego short term and look at different neighborhoods we want to live in. We moved to Rancho Penasquitos in January, and really like it here. We have been looking at buying a house here. But it seems like since the fall the housing prices have increased 10%! The bidding wars are out of control! We saw a house listed for 1.2 and it ended up selling for 1.478!
I’m trying to decide whether We should buy now or wait awhile. Maybe the prices will at least level out? I don’t know the San Diego housing market at all. Would love to hear some insight from anyone!

If you can buy something now, I definitely would for the following reasons:

1. Inflation rates are likely to increase, due to pent up demand, economic stimulus and generally improving economic conditions. This will push home prices significantly higher
2. To counter inflation, the fed will raise interest rates. Although that'll likely slow inflation (long-term), it'll make mortgage rates higher and home purchases even more expensive
3. Remote work is a thing. Lots of people are moving away from confined job centers. San Diego is a popular location for Silicon Valley remote workers, due to its comparative affordability, weather and lifestyle.

[joosoon]

Originally Posted by Racer46

The demand exceeds to supply and will for a long time. People have been posting here for years about a bust coming and ... the prices are rising even faster than when those posts were made.

Agreed. When's the last time anyone's heard someone seriously say that inventory is bulging at the seams in San Diego? When I bought my first house, the owner was looking to "get out from under a few properties" and I jumped on that deal. But that was three decades ago.


To the OP, I'd say when you can afford it is the time to buy. If your plans are long term, even moreso. Waiting for something to level out right now isn't a good strategy.

[JoeSanDiegoHomes]

I don't anticipate they will level out anytime soon. All of those bidding wars mean there's a lot of demand and for each person that won, there's another four people still looking. I would buy now if you can afford it and plan to live in the house for a while.

You are correct about your observation on the price of homes going up. Some have gone up more than 10% since the fall. One of my buyers that I was working with got outbid on a property that we submitted an offer 140k over list.

You can definitely wait. However I know many people who try to do that since March and have gotten priced out of their preferred neighborhoods.

[someguy10]

It's a matter of your priorities and your financial position. I would absolutely NOT buy right now unless you are ALL of these:

1) committed to staying in SD for a while (let's say at least five years)
2) financially sound/stable enough to handle it comfortably (do you have emergency savings? how easy would it be to replace a lost job in SD? etc)
3) confident of the area you want to be in (related to #1)

That said, timing any market is a fool's errand, IMO. You've got to both buy at the right time and sell at the right time.

[eastcoastbias]

You typically want to buy when interest rates are high or higher and then refinance multiple times down the road. Lower rates typically signal higher values on homes.

Like others have said...Don’t buy unless you plan on making this your home the next decade or two. You may ride a few up and down waves in that time.

[Axxlrod]

Values are high and increasing due to very low mortgage rates and record low supply.

Values will continue to rise until one or both of those things change.

Even then, values will most likely even out.

I don't see a major drop in values unless there is a major event like a war or nuclear attack or something along those lines.

[blockzilla]

In any kind of investment, when nearly 100% folks are advising you to do the same thing in terms of trying to time a market, it should be a red flag. Not a deal breaker, but a sign worthy of a bit more analysis. It's been 15 years since I've heard this level of "buy now or be priced out forever" enthusiasm, and we know what usually happens then, but this time it's different? It may very well be, there are some complex and fast moving dynamics mentioned in this thread by others that haven't been in play before.

That being said, it will cycle, it's just a matter of when. When we were first looking to buy in '06, we were "priced out" of the coastal areas we wanted and instead looking at places like Clairemont. Everyone said buy now, don't wait. Instead of rushing in, we rented 5 more years in the coastal areas we wanted, our incomes and savings went up, prices went down and we then bought low at the trough. Luck perhaps, but had we jumped into the frenzy we actually would've been "priced in" to Clairemont by buying at the peak. Nothing against Clairemont by the way, it's got some cool spots!

No matter what scenario though, you can be pretty darn sure you'll come out way ahead after 20-30 years, so if you're fairly certain you want to stay in the home that long, then I would agree with the "it's always a good time to buy" mindset. I wouldn't buy in an area you don't really want to be in just because you're fearful of missing out though.

[NYSD1995]

The problem right now, is not excessive demand but limited supply against already strong demand. So the question is, what could change that dynamic? A demand shock seems unlikely, and we just had a global meltdown and demand only rose, so you are looking at figuring out what conditions could arise (or already exist) that could balance supply against demand a bit more. To that end, look at areas that "typical San Diego" isn't so interested in. For example, everyone on this forum who wants to move here wants the same thing - walkable, close to beach, cool shops and things to do, great schools and they all have $$$ to spend. So look at the opposite -farther from beach, less walkable, lower end properties, etc. That's how you get into SD, or at least, that's how I got into SD. If you follow the crowd, you're going to be competing with them.