Today on Off the 56, I’m going to talk about the housing market here in San Diego. I know we talk a lot about living in San Diego, but I never really talk about the housing market here and what to expect when you’re trying to buy a home in San Diego County.
First off, we’re in the middle of a pandemic as you know. When it first happened, I expected the market to get quiet and for the first month or month and a half, it was that way. Nobody was really moving here, but about two months in, it went gangbusters. Everybody was trying to buy a home here in San Diego. The problem is, a lot of people didn’t really want to sell their home during the pandemic, so the supply of homes for sale just wasn’t keeping up with the demand of home buying. This brought home prices up considerably this year. You can check out this article from the San Diego Union-Tribune for more information about home price growth in 2020.
Currently, home prices are up 8% year-over-year and economists are projecting another 8% growth next year as the Fed has promised that they’re going to keep interest rates low until about 2023. One big reason why the home prices are going a little crazy right now in San Diego is because of the low rates. Click here to check out current interest rates on Bankrate.com as you might be reading this a little later than I recorded this video.
Another thing that’s going in the San Diego market is that there’s multiple offers on everything. My last eight buyers here in San Diego, seven of them had multiple offer situations, and all, but one of them had to go over asking price to get the home. If the price is right, a home here will probably sell very quickly and with a lot of offers. So, if you’re looking for home in San Diego, just be prepared for that!
Another big reason I think the housing market is pretty strong here is that people can now live wherever they want. Not everyone, but a lot of people have these remote jobs. I’ve had many people from Silicon Valley move down here, New York, New Jersey, and Chicago. If your job allows you to live wherever you want, then San Diego is a pretty good place! It’s not the cheapest place in the world obviously, but it’s cheaper than Los Angeles, San Francisco, New York and a lot of those other big cities.
Now, I’m not the type of guy that’s going to convince people to try to buy a home. I do think it’s a pretty good time to buy a home if you’re willing to stay in your house for five or more years. If you’re looking to only be in a house for two to four years, I don’t think it’s a great time to buy honestly because I think for the next two years the prices probably will still go up. Around 2023 when the interest rates finally start to go up and the economy is moving well, I bet you’ll probably see a little flattening of prices or maybe a small decrease in prices. So, it really depends on your situation. If you’re looking for your home for the next ten to fifteen years while your kids are growing up, then it’s a great time to buy and take advantage of the super low interest rates.
If you’re looking for a few tips on how to get your offer accepted here or where to look for properties in San Diego, here are my three best tips:
- Take a look at properties that just come back on the market. Usually back on market properties, they’re not going to have five or ten offers on them so you might be able to swoop in and get one of those. Also, look for ones that have been on the market for thirty or more days. Those are also ones that you’re not going to be competing with ten to fifteen people over.
- If you’re in the right financial situation, it might make sense to waive appraisals, contingencies, buy the home as-is, offer over list price, etc. However, I don’t really recommend doing any of those things unless you absolutely have to, and you fully understand what you’re doing. For a new first-time home buyer, I would not recommend this strategy.
- Another tip when you’re putting offers on a property is to write a letter to the seller, introducing yourself and saying, ‘Thank you for entertaining my offer’, etc. It does help a little bit. People, especially if they’ve been in the house for a long time, it really helps them to put a little name to the offer. Sometimes it’s not always about the money. Sometimes people want the house to go to someone that can take care of this house and will really appreciate the house the same way that they did.
Those are just three tips that I would recommend. Obviously, there are other ways to do it and you need to see how it feels for your specific situation.
I’ll try to do these market updates every once in a while, just to give you a pulse of the market here while not boring you with a bunch of numbers. Hopefully this is helpful! If you’re planning on moving to San Diego or already live here and are shopping around, I’d love to help you find your next home!