Where do Home Prices in San Diego Stand?

For the very first time within two years, an increase has been seen in the home prices of Southern California. Reports show that the home prices have increased by around five thousand dollars between April and May within San Diego.

However, doesn’t this mean that they have already hit the very bottom? The market shifts and much more activity of buyers can be seen in today’s day and age. From conversations with potential buyers, a lot of them are attempting to take full advantage of the federal tax credit of eight thousand dollars; the deadline is at the very end of the month of November. Additionally, a lot of buyers believe that the bottom has been hit and that it is time to make some sort of move or that prices are low enough to begin making some offers. From their point of view, affordability is high while rates remain low and it is now time to pull a trigger.

However, the reason these prices have gone up is because a decrease has been seen in inventory. This has not happened because banks have run out of foreclosures but since they have not released any brand new homes onto the market. This is partly due to moratoriums of the government which have ceased to release recent foreclosures that hitt the market. This has completely depleted the inventory.

However, banks also sell more foreclosures directly to investors at court houses; therefore, they never seem to actually hit the market. In efforts to agree with the plan of home stability that President Obama has started, lenders are doing much more in modifying current loans for homeowners to remain away from foreclosure. However, not every homeowner will be able to qualify.

Those that do not will end up in foreclosure eventually. The process for banks to take back homes, after the initial default notice, to get those properties already on the market for sale, could sometimes take around a year. Match this with government freezes and it really stalls the brand new REOs from making it onto “for sale” lists. There is a claim that only 2.5 month supplies exist all over the state. However, this amount merely includes houses that are below $300,000.00 and this price range happens to be where buyers can be found.

Within the month of May, more than eighty percent of sales were found below $500,000.00. The overall price range where the majority of brand new investors and buyers could actually afford it would be price ranges at low ends of the overall market. This, matched with inventory shortage, will result in numerous offers and will drive up the prices. A realtor has stated that almost thirty offers have been given on a single property that was listed at around $209,000.00, which included one for around $60,000 more than was asked. She could not even accept such an offer since the value meant nothing there and appraisal would not have occurred. Areas such as Escondido see fewer inventories and more competition with buyers within that low price range. Several clients tend to be outbid by investors who all offer cash.

                                                

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