A study just released by CoreLogic states that homes sold in San Diego this March had the highest prices in 9 years, with a median home price of $478,000. How is this possible with such low inventory, you may ask? Well, it is likely because of that low inventory that prices have skyrocketed. When levels are low affordability tends to increase as homes sell for higher prices, making it a seller’s market.
Another factor contributing to the current market status is that interest rates have remained exceptionally low, creating a surplus of buyers (some rates are reportedly under 4% for 30 year fixed loans). SpringÂ and Summer – the traditional “big” selling seasons – are in full swing with qualified buyers abound who have few choices. We are seeing multiple offer situations all over the place (I just wrote an offer the other day and there were 6 offers, all at or over asking price). Buyers are ready to buy and when a home in a desirable area is listed it likely will sell quickly – a strong reason to make sure you are preapproved if you are planning to purchase a home soon.
According to the report, home sales increased 5.1% year over year, with new home sales leaping 28.1% last month. All of this makes it a great time to sell, but many sellers do not do so because they are afraid they won’t find replacement property, putting many in a Catch-22 situation. On the other hand, home improvement stores have been doing very well since the start of the year, as many homeowners may be deciding to make improvements rather than chance selling with no where to move – we seem to be stuck in a rut of sorts.
Here in North San Diego I have seen a lot more off-market homes being marketed to real estate agents. In other words, agents list properties and market them without putting them on the MLS (a VERY good reason why all buyers need to have agents!). Many of these homes do not make it to the MLS until they are in escrow, giving buyers no opportunity to view them or make offers. This is frustrating but the early bird gets the worm I suppose. I have received emails and recorded phone calls about property that are not on the market yet but are being marketed to brokers or agents.
The bottom line is that prices have definitely risen and inventory is tight, but if you do your homework and prepare before buying or selling, you should be able to do well. If you are merely selling and have an appealing home in a desirable neighborhood you will be in the driver’s seat. If you are buying make sure to get preapproved, work with a real estate agent, get educated on the market in which you focus your search, and be ready to write the strongest offer you can.