“Do you think that now is the right time to buy a home in San Diego?” That’s the most common question that I get on a daily basis from the many buyers who are currently sitting on the sidelines waiting for the San Diego real estate prices to further fall. I tell them that with prices already low, combined with low interest rates and the new higher FHA loan limits in effect, we have seen an increase on the number of home sales since the mid of January this year which if sustains, prices are going to start rising pretty soon.
As a matter of fact this month I wrote three offers on three different properties which had multiple offers (one of them had 16 offers), some of them several thousands above the list price. Some of those buyers will argue the reports that listen on the news and read on the newspapers which suggest that the San Diego home prices will further fall. For months now the news and the papers have been reporting news that are based on outdated (30-90 days) data. In addition, a story about a falling real estate market will sell more than a story about a stabilizing real estate market.
Finally today there is an article (which should be done at least a month ago) on the Forbes magazine about “America’s Riskiest Real Estate Markets” which suggests what we have been saying since February. That real estate prices may start to rise over the next six months.
In cities like San Diego, one of five major metros where transactions rose, that’s good news, assuming it’s sustained. What makes transaction volume a good indicator is that it shows how easy it is for people to get loans and how much confidence there is in the market. If mortgages are available and buyers have some faith in the value of the home, they’re more likely to buy.
San Diego’s present conditions suggest that over the next half-year, prices may start to rise. That’s because “there’s usually a three- to six-month lag between when transactions go up and prices go up,” says Jonathan Miller, president of Miller Samuel, a Manhattan real estate appraisal firm.
Another good sign for the coming year? Increased credit availability.
We took into account increased Fannie Mae and Freddie Mac (GSE) loan limits. The new legislation will open up credit in markets such as Sacramento and San Diego by boosting the GSE loan limit by 125% of the median price. That’s a huge deal for San Diego, where 18% of the market will see improved lending conditions, based on projections by Radar Logic, a New York-based real estate research firm.
Source: Forbes Magazine
If you are one of those buyers sitting on the sidelines for the home prices to further fall before you buy a home in San Diego, maybe that time has already come!