Has the San Diego housing market hit bottom? The answer is yes and no. The portion of the market that is comprised of first time home buyers and investors looking for a great deal has hit bottom. The segment looking to upsize or is interested in a luxury home has remained a buyers market. If you are looking for a great bargain than it is time to get moving, because your days of the deals may be numbered.
Carlsbad, for example currently has 468 active listings and 249 that are in escrow. That’s a healthy market! If we look at inventory that is below $700k, than we have 198 available listings and 187 that have been put into contract. That market segment is by definition a seller’s market.
The stats for sales have been holding around 2,000 a month for San Diego County. We did see an increase from March to May, but that may be do to the Summer sales increase. Another factor in the numbers is that the system San Diego uses to track the numbers has changed.
We now have a new category that we use to define the status of a property which is “contingent”. We used to have just actives, pending and sold, but due to the high number of bank owned homes and short sales we’ve added a new category. This category designates that the property has been accepted but is waiting for lender approval or in the case of a foreclosure they are waiting to have bank paperwork signed. The reason this new category may be important in the stats is because the now contingent properties were previously pending or active depending on how the agent wanted to enter it in the system. Right now they contingent sales are making up around 23-25 percent of the real estate data.
Federal Incentives: 1. $8K for first time home buyers
2. California state credit for new home construction, Max of $10,000 limited funding
Home Loan Rates Still Low: First off, yes there is plenty of financing available to qualified homebuyers. Home loan rates have bounced from upper 4s to upper 5s in rather volatile fashion. Currently, we are seeing quotes in the 5 ” 5.5% range for the most part. This remains a low-point for home loan rates – it is truly an unprecedented opportunity for home buyers to lock in one of the best rates in history.
Are these great loan rates here to stay? We all know that inflation usually effects rates in a negative way, and we may see the effects of inflation soon. Rates also follow the stock market, so if stocks go up usually rates go up and vice versa.
Market stratification – luxury vs. lower-end: Luxury prices continue to drop, while low-end homes appear to have hit bottom. I may mention this concept a lot, but it is the core factor of what Im seeing in this market right now. The market is based on what you’re in the market for. You have to understand your price range and the micro market of the area you’re interested in.