It’s no fairytale - Now may be the best time for ANY move you make in San Diego.
The San Diego real estate market may have actually found a point where the only bad move you could make would be no move at all. For the last handful of years, I can assure you, I would not have made that statement, nor would the market have done anything to validate it. However right now there is tremendous opportunity for people to get in, get out, move up, move down or even move away from our market.
In the famous story, “Alice in Wonderland”, Alice asks the Cheshire Cat, “`Would you tell me, please, which way I ought to go from here?' and the cat replies, “That depends a good deal on where you want to get to.” Just like Alice, I truly believe most home sellers and home buyers have the luxury of being in that position – you just need to decide where you want to go. Let’s examine the facts from a home seller’s perspective first.
Home sellers who have equity in their home and price it at the fair market value will assuredly have buyers making offers right now. As of this writing there are only 7250 homes available in the Multiple Listing Services where brokers post properties listed for sale – that is a staggering low inventory especially when you break it down to what makes up that inventory. Let’s work from assumptions that roughly 35% are short sales, and 25% are Bank Owned, that would mean that there are only 40% or 2900 homes on the market where there is a seller who can easily and quickly, 100% participate in and decide how a transaction will close. With the lack of inventory, this type of property is coveted by a pent up pool of traditional buyers trying to find a property to call home.
Now for home sellers who don’t have equity in their property and are “underwater” – the option of short selling has finally streamlined to a point where bank approvals are quicker and more predictable. If you hire an agent who knows how to work with banks and their paperwork and procedures, you have your best opportunity in years to sell your property and be freed of the debt, the guilt and the burden of something that has been holding you down. The reality is home prices aren’t soaring up, nor personally do I predict that for years. So, if you can get out from under a home that is crushing you financially and emotionally, and enter the market in a few years, you could be in some cases 10s and 100s of thousands of dollars ahead. The system has been refined through both government and public pressure and recent legislation that if you are ever going to be “let off the hook” lightly, now is the time. As a matter of fact, some of the legislation relieving you of taxes on “debt forgiveness” will sunset at the end of the year – so acting now is prudent. Given the low inventory, your home should draw a market value offer, and this should help make it easier for a bank to approve.
Buyers on the other hand can buy with the assurance that we are at or around the bottom of the market. If someone is planning on living here long term I believe homeownership is a “no brainer” - they have prices at or near 2002 pricing and showing signs of rising, mortgages at record lows and rents at record highs. You to need to sit with your accountant, a loan officer and a real estate agent – play with the numbers – you will see that homeownership’s tax advantages often make owning a home cheaper at the end of the year than renting. This is a powerful hedge against inflation and a forced savings plan - with rent you are forever throwing your money away and paying off your landlord’s mortgage. If you already own, and are thinking of moving up or moving down you have a great opportunity too. The math is perfect – you have buyers ready for your home, and buying conditions that add up to you being in a better financial position than you were in the 1990s. Now is the time to act.
So, unlike Alice when she proclaims, “It would be so nice if something would make sense for a change,” I think the San Diego Real Estate Market finally is making sense for anyone in who is considering buying a property in our gorgeous county. So do the math, look at the signs and realize now is the time – don’t be like the White Rabbit and run frantically around screaming, “I’m late, I’m late!” Take advantage of this unique window where just about all roads lead to your financial well being.
Mike Marmion, General Manager
Pacific Sotheby’s International Realty