Now that 2015 year is almost over, it’s time to take a look at the San Diego Real Estate Market, both what’s happened and what is on the horizon.
I decided to enlist the help of local Realtors to get some local insight from those that are actually out in the tranches.
Participating in the article:
Thomas and Maya Brooks
|Coldwell Banker West||Keller Williams Realty|
Q: Are we in a seller’s or buyer’s market?
Brooks: It certainly feels like a seller’s market, the best properties are selling within the first week on the market many times with multiple offers. San Diego became a seller’s market towards the latter half of 2013, favored by low
inventory and extremely desirable interest rates
Q: In your opinion, has the housing market stalled or do you think it is continuing it’s recovery/growth?
Brooks: Although price increases have stabilized as owner-occupied and rentals (investors) have replaced “flippers” as buyers, the demand is still extremely solid reflecting improved consumer confidence and low mortgage rates.
While inventory remains historically low, if demand continues to strengthen, price increases will reduce affordability. We need many more months of growing inventory and sales to adequately balance supply and demand.
Clemens: The housing market has stalled somewhat, but I believe that is a natural part of moving towards a balanced market. We will continue to dance between mortgage rates and inventory levels as we slowly make our way back to a “normal” market.
Q: What do you think is the biggest obstacle for potential buyers?
Clemens: The biggest obstacle for potential buyers continues to be low inventory levels. Until the inventory increases buyers will continue to face multiple offer situations which drive prices up.
Q: What areas of San Diego do you think are the hottest markets as far as demand?
Brooks: In the Metro area, South Park and North Park are hot markets for both First Time Buyers with a higher price range threshold as well as more seasoned homeowners looking for a more urban feel. Clairemont and Mira Mesa are also very popular now, particularly among young families. And in North County, Carlsbad and Encinitas are the most competitive markets.
Clemens: Currently the “hottest” market is urban condos. As we see more millennial enter the market they have a desire to be in a more urban setting and condos are the most affordable. Their biggies competition however are baby boomers who are looking to downsize and desire the walkability to area markets and restaurants.
Q: What area(s) do yo think offer buyers the best value?
Brooks: Grant Hill, City Heights, Paradise Hills, Imperial Beach and the College area all offer excellent value per square footage. The price points in those areas are very affordable for those looking for a bargain.
Clemens: San Diegos’ best kept secret has been La Mesa! It offers great value and still only 12 miles from the coast, and just west of the hottest part of the county! However more and more buyers are quickly discovering this market, so it won’t be secret for much longer.
Q: What do you forecast will happen during the last quarter of 2015 and into the first quarter of 2016?
The past couple of years the last quarter of the year has slowed considerably, and then picked up sharply in the first quarter of the new year. I don’t see this year being any different other than maybe a little more extreme, meaning lower lows and higher highs.
Over all we are still in a recovering market and trying to find our new “normal.” We can anticipate a vetting process. Also the local and national economies will always have an immediate impact as we saw when the Fed said they “may” increase mortgage rates. Also, in 2016 we have a Presidential election which always impacts the market as more potential buyers and sellers start basically treading water until they feel comfortable enough with the direction of the economy to dive in.
Brooks: The housing market played a key role in the economy recovery. This year job and income gains, low mortgage rates, affordability and an easing in lending standards will favor the forecast the last quarter of 2015 and first quarter of 2016.
The California Association of Realtors expect home prices to continue rising through the end of this year and into next. Therefore, San Diego house prices could increase more sustainable and moderately, compared to what we have seen over the last couple of years. The double-digit price increases of the recent years are result of the housing market collapse of a few years earlier. Home prices had a long way to regulate, so they rose quickly, especially as the economy recovered.
As there you have it. A look at the San Diego Real Estate Market, current and future.
A big thank you to The Books Team and Maggie Clemens for offering their expertise and opinion.
Please don’t hesitate to contact them with any questions about the Real Estate Market or enlist their services to buy or sell a home.