The recent article in USA Today about current home prices and home ownership has some good points, being a REALTOR in San Diego I definitely see many of these issues on a daily basis. Some points that stood out to me from the article were:
“Consumer attitudes have gotten a lot more negative about long-term commitment,” said Standard and Poors’ David Blitzer, after reporting home prices through September had fallen a deeper-than-expected 3.9%, compared with the third quarter of 2010. “They dropped to new lows. This takes them below the point we saw in 2009, where briefly we all thought this thing was about to turn around.”
“Every time we think things are turning around in the housing market, we get hit with some new problem, like last year’s so-called “robo-signing” foreclosure paperwork scandal, which managed to stall the cleansing of distress in the market for over a year. Now that foreclosures are ramping up again, prices are coming down again.”
To be polite let’s just say the current real estate market is a mess. Prices are definitely not at the bottom, and as much as the news and maybe your REALTOR wants you to believe they are, I am still seeing a consistent drop each month in the prices of real estate in San Diego. Not to mention the huge inventory of real estate the banks are sitting on, either waiting to foreclose on, or waiting to put on the market for some reason.
- 6955 Alvarado Road Condo on the market for $100 to $120 000
Recently I am coming up with a new issue and that is in the San Diego condominium market, the HOA’s have not maintained their certs. That means if you attempt to purchase a condo in San Diego, and your offer gets submitted, only once you are in escrow do they ask for the condo cert from the HOA. Without that being current, most large institutional lenders will not do the loan, that means cash offers only. (There are some lenders that claim they can get a loan done without current HOA certs for qualified buyers. They are called limited review lenders. Personally I do not see how that possible to make a loan when you are aware there could be issues with the property.)
I just had that come up on my listing at 6955 Alvarado Road, by San Diego State. This listing is a short sale, and one of our offers was a financed offer with 30% down. Right before we accepted another REALTOR told me that a deal in that complex had fallen out of Escrow because the HOA certs were not current, so I have now changed my listing on the MLS to cash offers only till we figure this out. A condo cert addresses owner occupancy rates, litigation and levels of delinquent HOA dues
My other buyers right now are all holding on the sidelines to see what happens since most who started looking for homes this year have seen the prices of the homes they are looking at continuously drop. Since they are cash buyers that would be money they are losing instantly out of pocket. One of the home I sold at the beginning of this year in downtown dropped in value almost $50 000 in less than 60 days after we purchased it. He financed it and is there for the long term but was still upset. If he was a cash buyer he would be out of pocket $50 000 immediately. Another one of my buyers is looking for homes in Mission Hills, one of the homes we looked at in June that we almost put an offer in on dropped over $200 000 less than 60 days later. The reality is even with these low interest rates tempting people to buy a home, it’s still very unstable.
The flip side is how much lower are we really going to go, and if you really find the perfect home for you then buy it, and that is the point I am with my buyers right now. The tough part is finding that perfect home, because there is not a lot of single family home inventory in San Diego. On the other hand there is a huge inventory of condos right now in San Diego, some of them are truly steals, so it’s going to be interesting to see what happens with these condo certs.
Now is a great time if you are interested in buying a new home in San Diego to live in or as an investment. If you would like to some help finding your new home or have any questions it would be my pleasure to help you, you can call me at 858-314-8145 or through my web site at http://gl-investments.com/contact/.
Hi Gavin, I agree that this is a good time to buy now in San Diego. Do you have any particular counties that you can recommend? Also, wouldn’t later in the year be a better time since most people buy at the beginning and middle of the year.
Robert I really like the clairemont, mission hills and carlsbad areas, they have a ton of listings and the prices are really low compared to their highs.