This morning The S&P/Case-Shiller Index of property values was released, and the property values 3.4% from October of 2010. Bloomberg covered the drop in estimates, you can read the full article here. I took note of few points that made total sense to me as a REALTOR here in San Diego.
” The S&P/Case-Shiller index of property values in 20 cities dropped 3.4 percent from October 2010 after decreasing 3.5 percent in the year ended September, the New York-based group said today. The median forecast of 27 economists in a Bloomberg News survey projected a 3.2 percent decrease.
The real-estate market is bracing for another wave of foreclosures that may keep pressure on home prices, indicating any housing recovery will take time to develop.”
I really think that percentage drop is a little light in my opinion, since it take 20 cities across the US. When I take clients looking to buy a new home in San Diego I am seeing home prices close to 2003 sales prices in many areas of San Diego. I agree with the wave of foreclosures that are going to hit the real estate market in San Diego. When I take a look at Foreclosure Radar I see way to many homes in the foreclosure process, and it seems like the bank have their act together more too.
San Diego home prices continue to drop as foreclosures loom
My short sale listing in the San Diego State University area is at the bank right now and is expected to close in less than 120 days as per escrow, that is down from the 6 months or more it used to take to close a short sale. You have to remember my client has a note for almost $250k and we submitted an offer for $110 to the bank. That’s over half price and is the current fair market rate for a 2 bedroom, 2 bathroom condo in that building.
The whole fair market value is based on what other properties in that area, and of that size sell for. Can you imagine when the foreclosure hit what will happen to the value of properties surrounding it, they will fall significantly. I am taking a client tomorrow to see a home in Bird Rock that is almost 3300 sq foot and is going for between 950k and 1.1 million dollars. This same home was close to $2 million when the economy was at its peak. Right now I am working with a few real estate investment clients that are looking to buy homes that they can rent out with cash flow potential. From downtown San Diego to Del Mar you have properties that are prime for this time of investment property investor. This is due to the fact of the huge amount of units that were built in the last 7 years that rent out very easily because they are close to major freeways.
If you are thinking of buying a new home in San Diego, or buying an investment property to rent out I would love to help you. You can always contact me through my web site at www.gl-investments.com or you can call me 858-314-8145.
