According to the latest market trends report, the Southern California real estate market is continuing to provide excellent investment opportunities for buyers. In fact, even with the dreary news reports to the contrary, sales of homes in the San Diego area appear to be poised to rival the sales from last year, when the tax credit incentives helped boost sales for half the year. The San Diego real estate market has 5.1 months of unsold inventory on hand as of September 2011 (the date of the most recent market statistics). This is down from 5.9 months of inventory on hand during the same time period last year, showing that demand for and sales of homes has increased.
September 2011 marked the third month in a row that home sales increased, staying at a "stable level" per the California Association of REALTORS®. The total sales volume for September 2011 was 6.7% higher than September 2010, with the median price for a California home being $249,000 (down $16,000 from last year). Pending sales were also up for the fifth month in a row compared to the same period last year.
The 3.2% decrease in month-to-month sales prices was attributed primarily to the large levels of foreclosures and short sales on the market (34.2% of total sales were for foreclosures while 17.8% went towards short sales). They tend to be sold at much lower prices than traditional San Diego area homes.
These more affordable prices and the availability of conforming loans with low down payments helped first-time homebuyers and lower income buyers purchase homes this year. Investors have also been inspired to jump into the San Diego area real estate market thanks to the great deals out there. In fact, 59% of properties purchased solely for investment (not occupied by the owner) were paid for in cash in September 2011. Those that did take out a loan to fund their investments found that their payments were almost $100 less per month than the same time last year. But, with the rate of foreclosures decreasing (down 15.7% from the third quarter of 2010), buying a foreclosure at auction won't be as easy as before.
As of this writing, the interest rate for a 30 year fixed rate mortgage is 3.77%-4.36% APR, according to Bankrate.com. With interest rates continuing to hold steady at historically low levels, inventory of San Diego homes plentiful and varied and affordable prices, there's no reason you shouldn't consider buying a home today. Whether you want to find a larger home for your growing family, downsize after the kids have moved out, need to buy your first home or want to find an investment property to expand your real estate portfolio, I can help you find the right property for your needs. Just contact me today to get started.
Mark Levenson, Helping You Buy and Sell Homes, Condos and Investment Property
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