Title: Dan Melson's San Diego Real Estate and Mortgage Website
Author: Dan Melson
Blogging since: May 2006
Post Date: September 22, 2006
Post Title: Buyer's Strategy for the San Diego Housing Market What's next for the San Diego housing market? The next thing that starts to happen is rents rise, and when they do, more buyers move into the purchase market. We've already seen some of this. Also, some sellers have moved out of the market. A few weeks ago, I was seeing active listings total about 23,800 locally, and they're down to 22,500 now. Furthermore, the number of buyers has risen by about 10 percent or so in the past couple weeks. Net result: We were at 38 or 40 sellers per buyer most of the summer. Last week it dropped to 34, and this week it's at 33. This is starting to look like it might be a trend, and when the ratio of sellers to buyers drops enough, prices are going to stabilize, the period of best deals will be over, and people are going to rush back into the market. It's got a long way to go, but where I have predicted Spring 2008 as the most likely market recovery point locally, I'm thinking now that it will more likely be some time next year, most likely early summer based upon current trend lines. Those who are thinking that we're going to see $200,000 detached single family homes in San Diego are most likely going to be disappointed. I've said all along that the economic pricing support was there for $350,000 starter homes, providing rates stay about where I think they will, and rates going higher than I think they will (about 7 percent on a 30-year fixed, where we're right at 6 now) means lenders will suffer even more in the short term in order to salvage their bottom line further out. I really don't think they will make that choice.
However long it takes, if you wait for the market to turn, you will now be at maybe 5 to 10 sellers per buyer, which is a more normal ratio, and when you don't have 30 sellers per buyer, you can't get them to work with you nearly as much. Prices will start moving back up, and if you wait for that to happen, you are hosed. It is far better to move now while prices are still moving somewhat downward. Yeah, you might "lose" a little on paper until the market turns. But you have the opportunity to negotiate a better bargain now than you will then. (Numbers and statistics current as of September 22, 2006.)
* * *
Post Date: November 6, 2006
Post Title: Hot Bargain Property Detached Party Room in A Great Neighborhood!
General: Urban East County, 3 bedroom, 1.75 bath. Asking price between $425,000 and $450,000. I'd probably offer $390,000 to start with.
Why you should be interested: This is a very appealing home in a great older neighborhood with fantastic schools nearby. This street has many more expensive homes.
Selling Points: The back yard is great for entertaining; almost a garden. It also has a detached room that could be used for dance practice, as a martial arts practice area, or just for entertaining.
Why I think it's a potential bargain: Vacant and on the market for a while, and we're entering a slow time of year to move real estate. If they're smart, they'll sell to anything close.
Obvious caveats: New condos behind the property.
Why it hasn't sold already: I do not know. It's priced $30,000 less than a comparable property in not as good condition. If you keep it ten years and it averages only 5 percent annual average appreciation per year, based upon a purchase price of $390,000, the property would be worth approximately $630,000. If you held it those ten years before selling, you would net about $300,000 in your pocket, assuming zero down payment. As opposed to renting the $1500 per month most comparable current rental and investing the difference at 10 percent per year tax free, you would be approximately $130,000 ahead of the renter, after the expenses of selling. Fact you should be aware of: New condos overlook the back yard.
Obvious way to enhance value or appeal of property: Update the fixtures, buff the hardwood floors, and maybe convert the detached room into a granny flat. This property does not appear to be eligible for a first-time buyer Mortgage Credit Certificate, provided your family income is not more than $82,800 or $96,600. Ask me for more details on this or any other property. I'm a buyer's realtor. I find places like this that can be gotten at bargain prices. I save you money while getting paid out of the listing agent's commission, not costing you a penny. Nor are these the only ones I find. In order to protect everyone's best interests, I require a Non-Exclusive Buyer's Agent Agreement. This is a standard California Association of Realtors form that leaves you free to work with other agents, but if I find the property you want, I'm the agent you'll use. That's fair.
Contact me: Action Realty, 619-449-0723, ask for Dan or e-mail [email protected] Ask me to find a bargain that fits you!