Real estate markets have historically always been cyclical. At times prices are high, which is referred to as a seller’s market, and then prices drop and it then becomes a buyer’s market. This has happened all over the world, throughout history.
It is now a buyer’s market internationally. As a result, it is an outstanding time for a buyer to purchase property most anywhere in the world, which includes San Diego. In the last four years, prices for properties have decreased in San Diego anywhere from about 30 percent to 60 percent throughout the county. We have not been hit as hard as many other cities, like the cities located in the states of Florida, Michigan and Nevada where the housing market is more devastated. We have experienced a buyer’s market in the last few years like everywhere else in the nation and beyond. However, here in San Diego it has been an active market. It is not uncommon for there to be multiple offers in on a property, particularly when it is priced properly for today’s market. Nevertheless, it is a great time to buy property.
If you are renting, you owe it to yourself to consider buying a home. Even if it is a simple condo it can be very beneficial. If you are already a homeowner, you should consider buying an investment property. Historically real estate has been one of the best investments in the world.
There are many books, CDs and workshops that can educate you on investing in real estate. But the single most important factor in real estate investing is the timing. As a general rule, you sell when it is a seller’s market and the prices are high, and you buy when it is a buyer’s market and the prices are low. Investing in real estate is not as complicated as it may appear and you do not need to be an Einstein to make good real estate investments.
To give you examples of the San Diego buyer’s market, I met with a buyer of mine from New York last week. She flew out to San Diego to buy a second home here. After spending all week with her, we were successful in finding her a place. She bought a two bedroom, two bathroom condo in University Heights. It has a very nice updated kitchen, fireplace, private patio, laundry in the unit, central air conditioning and heating. It is in a secure building and has a low homeowners association fee. The property was listed at a price range of only $169,000 to $198,000 and my client was able to purchase it well within the middle part of that range. This is an outstanding value for the area and for what she is getting. Needless to say, my client flew back to New York with a big smile on her face.
I have another client who is currently buying a 2,700 square foot office building in North Park. The property was only listed for $350,000 and the buyers got it for under the list price. This is another fantastic deal for the buyer and a good example of what is available right now for buyers.
I also have an immaculate three bedroom, three bathroom townhome in Rancho Bernardo with beautiful views, remodeled kitchen, fireplace, new carpet, new paint and a garage listed at a price range of $289,000 to $329,000. It is now in escrow within the range and the buyer is getting an incredible value with regard to the price.
In San Diego, there are a lot of buyers looking for property. There are first time homebuyers who can now afford a home with the lower housing prices. There are investors who are always looking for a good investment. There are regular buyers who are always there due to their personal and professional needs. And of course there are a lot of individuals who are seeking a second home or a home for retirement. San Diego is a very beautiful city on the Pacific Ocean and bay, with one of the best climates in the world year round. As a result, there is still a very high demand for property in this buyer’s market. In fact, the low housing prices have created the buyer’s market, which is generating the high demand for housing.
Be smart with your money and have it work for you. Most savings accounts, money markets and certificates of deposit (CDs) currently have very low interest rates. So you cannot make much interest income on them. Buying real estate is by far a much smarter way to invest your money. For example, if Tammy Ten has $200,000 sitting in the bank yielding .05 percent interest, she would only make about $1,000 on her investment for the entire year. If Tammy took that same $200,000 and invested it in a small house or a condo, she could rent it and increase her return on her $200,000 from about $1,000 a year to about $12,000 a year depending on the property she buys.
Even if you do not have money sitting in a savings account, mortgage interest rates are remaining historically low. So you owe it to yourself to consider investing in real estate, particularly while it is a buyer’s market. Happy house hunting!
Trent St. Louis is a licensed Real Estate Agent and a member of the National, California and San Diego Association of Realtors. He can be reached at trent@tns.net or at his office in Hillcrest, The Metropolitan Group. DRE#01273643.
