2013 – a Perfect Storm for Sellers In San Diego
Several events have now come together to make 2013 a perfect storm for sellers. Yet, inventory remains low.
Employment is up, confidence is up, and speculative new home starts are actually in the works in some parts of San Diego County.
Qualified buyers – some with cash – have come to the realization that while they were waiting for the bottom to come, it came and went. That happened in 2009. Now they’re ready to act.
Distress sales have slowed down and now have less of an impact on the market. When distressed inventory does hit the market, it is being snatched up by larger numbers of cash investors on the lower end and savvy qualified buyers on the higher end.
The credit markets have loosened. While credit has been very tight, the home loan market up to $900,000 is open. With the expansion of the secondary credit market, we will start to see more options for those looking to buy yet needing credit in excess of the FHA cap at $697,500.
Balance comes about in a market when there is about 58% home ownership. Right now we’re out of balance, with more buyers than homes for sale.
As the rental pool increases, rental rates increase. As rates increase, more renters move into home ownership. At the same time, as home ownership hits 60-61%, the market overheats. Some who should remain renters end up owning homes. Defaults increase and prices come back into balance.
It’s a never-ending dance, and right now the dance favors sellers.
IS NOW THE BEST TIME TO SELL YOUR SAN DIEGO HOME?
The answer depends upon the “Who” and the why.
Upside down homeowners who don’t plan to stick it out should sell now.
Homeowners who are upside down will find 2013 the last time it will be relatively easy to get a short sale approved.
It may also be the last year when it’s financially safe to short sell OR allow a foreclosure. “Getting out” in 2014 could mean facing a huge Federal Income Tax debt on lost equity.
2013 will be the year when owners realize that loan modifications were not the panacea that everyone expected. Thousands now find themselves in worse financial shape for having made the effort – and they still lost their homes.
For many, loan modifications simply postponed the inevitable. Financial experts predict that 80% of the currently approved loan modifications will fail, and as prices increase, banks will be less forgiving. They’ll be eager to foreclose to get out of the bad note.
Unless the home you are in meets a significant personal need, and unless you can afford to keep making the payments until prices rise significantly, now is the time to sell.
The good news: Distressed homeowners who sold as recently as 2010 are already eligible to buy again. And due to the combination of lower prices and rock-bottom interest rates, this time their payments will be about half of what they were when they bought at the top of the market.
Homeowners who simply want or need to move should sell now.
If you want or need to move, it makes sense to take action now. If you wait a year or two, of course you’ll get a higher price for your home. At the same time, you’ll pay a higher price for the home you purchase to replace it.
If you need to move to a different community right now, you could keep the house and turn it into a rental property. But that comes with tax consequences as well as the risk that the home will be damaged and need expensive renovations before it can be sold.
And, unless you qualify for a second home loan, you’ll be tossing money down the “rent drain” for a few years.
Move-up sellers/ buyers in San Diego should act now.
Move up sellers/buyers are in an enviable position if they act fast. The prime position is NOW.
The middle market is getting busier, credit is opening, and home prices are heading up. Low inventory means your mid-range home should sell quickly, leaving you free to purchase that luxury home.
For move-up sellers/buyers, the news is all good.
Percentage-wise, prices have risen more in the $600,000 to $1,000,000 range than in the $Million + market. So if you are looking to buy at $1.2 million, you may want to act now to lock in that $1.2 purchase before the high-end market catches up.
Investors should also think about moving up now.
The investor with a 4 unit building could sell at $800,000 or wait for $880,000. But perhaps he should sell now at $800,000 and leverage into a 12 unit building– which is a steal TODAY.
Should you sell now?
If so, get in touch. The HaroDunlap Team has a list of qualified buyers who are waiting eagerly for the right house. Yours may be “the one” for someone on that list.
In neighborhoods from Little Italy and Gaslamp in Downtown San Diego to the communities of Bankers Hill, Hillcrest, Kensington, La Jolla, Mission Hills, North Park, South Park, and University Heights, inventory is down more than 56% from 2012. Thus, properly priced homes are attracting multiple offers.
And if you’re underwater, don’t worry. We specialize in handling short sales and have a track record of 98% success in closing our short sale listings. We’ll be happy to explain the process and answer all your questions.
You can reach the HaroDunlap Team by writing info@harodunlap.com or by calling 619-299-HARO.
Competition for homes in San Diego County is strong.
The successful buyers are those whose agents keep them in touch with new homes coming on the market, and who are ready to act quickly when they find “their” home. In addition, successful buyers are those whose agents know how to present their offer to best advantage – and how to negotiate in a manner that keeps the door open.
You have questions and concerns, The HaroDunlap Team are the REALTORS® with the answers and solutions…
The HaroDunlap Team has something that’s becoming rare in today’s world: A genuine desire to get the most beneficial results for each and every client.
Buying or selling a home in San Diego right now can be a satisfying, pleasurable, and rewarding experience when you have The HaroDunlap Team at your side.
We have:
• Extensive knowledge of the San Diego real estate market
• Years of experience in helping buyers and sellers realize their goals
• Skill in negotiations
• A sterling reputation in the San Diego real estate community
The HaroDunlap Team specializes in assisting with the purchase and sale of San Diego real estate – from detached homes, multiple units, and luxury properties to condos and town homes – and in neighborhoods from Little Italy and Gaslamp in Downtown San Diego to the communities of Bankers Hill, Hillcrest, Kensington, La Jolla, Mission Hills, North Park, South Park, and University Heights.
Whether you are a buyer, an equity seller, or a homeowner who is underwater and needs a short sale, we’re here to help you achieve the best possible outcome.
Call or write today!
