You should buy San Diego real estate, but just not yet…

keep-calm-and-be-patient-27We have finally started to see the effects of higher interest rates on San Diego home prices as the real estate market conditions seem to have changed. Nothing happens quickly from a county-wide real estate perspective, but we can see it in the numbers already. Just two months after mortgage rates went up almost a full percentage point in one week, inventory is up, sales are down and prices have started to fall as well. Read more here: San Diego Home Sales and Prices Slip.

Some experts predict this is just part of the cyclical change that takes place after school starts and the summer is officially over, but I see a bigger move here. Investors are pulling out of the market in big numbers, home sellers are chasing the market down and buyers are just flat turned-off by higher rates…

Ready for the good news?

This shift should create a VERY good buying opportunity. I have personally begun my search to buy real estate in San Diego county with the expectation to start making offers around December/January. This is when the market should be at it’s softest spot. Many of the homes I have researched were listed in the middle of the summer and didn’t sell. These sellers have now started reducing the price or “chasing the market down” trying to find out what their home is worth. This is a good sign that deals are right around the corner, so stay patient… A great time to negotiate a deal on your perfect home is right around the corner.

Listen to today’s Mr Credit Radio podcast commercial-free here:

Today’s On-Air Experts:
Jon JerotzSan Diego mortgage expert with Guaranteed Rate
Elizabeth StorySan Diego real estate agent with Story Realtors

Categories: Buying Real Estate, Credit Repair, Mortgages, Radio Shows, San Diego Mortgage, San Diego Real Estate Market, Selling your home

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8 replies

  1. Great article! This is true and we are seeing it in our own practice on many ends of the County. Your timing for finding that “right” property has good logic to it but we can expect that the Feds are going to announce on the 18th of September when they meet their intentions to continue to loosen the throttle on mortgage backed securities which means we need private money back in and to do so the rates will have to go up in order to make it an attractive return on investment. Thanks for sharing this!

  2. The ever-questionable FED will always be there, but you’re right, rates need to go higher to make the back-end business better. If that happens though, prices are likely to suffer further. I don’t think we’ll see mortgage rates above 6% for a long time and that means that rates will be good in my book! 🙂

  3. I think that interest rates even though they have gone up about 1% are still very low and people should take advantage of these rates. The inventory in my neighborhoods that I have been working and selling are very low, the new ones are gone usually within a week. Investors are buying up everything that is not already renovated, so to say that investors are disappearing, I see the opposite. I see way too many investors competing for properties. I see the inventory moving slower then March-June, as it was red hot and I have always experienced a slowing from July 1-Sept (labor day). I have seen more activity on my properties in the past couple of weeks and very optimistic. I expect September through February to be the way it is every year, slow and steady. I am optimistic that we will continue to have steady growth, I expect rates to inch up and sit around 4.75 to 5.0%…and I think that is still a good rate. If we get to 6.0% I see trouble.

  4. Neil, you think it’s just cyclical then? What area of San Diego are you seeing investors still dominate purchase activity?

  5. Close the deal before the end of the year. I predict a surge at the first of the year from buyers who have been waiting and watching for the “prefect” house and sellers who are finally ready to react.
    The last few years January has been a very active month and I see 2014 having the same potential.
    The best deals are made and found by – searching for motivated sellers, looking when others aren’t not looking and buying the ugly house.

  6. Janet, I love it that you’re calling the month! I agree for the most part, but can’t imagine another good January after the last couple we’ve seen. Seems like way too many houses hitting the market for current demand and the price reductions are rampant everywhere I’ve asked about. Hard to see that getting solved by January, but we shall see very soon! 🙂

  7. most homes in sd are over priced for the wages unless you make $100-125K a yr uc 92122 over priced by $100,000 the cma i got at a open house 25 listings ,8 of them reduced there was 8 pending Date: Mon, 16 Sep 2013 21:56:47 +0000 To:

  8. That sounds like a pretty balanced amount of pending vs. reduced, etc, but when was that? This is supposed to be the HOT time of the year and yet it still seems like the trend is changing.

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