San Diego Housing Market February 2016, Home Buying Tips in a Low-Inventory Market

This low housing inventory environment is not projected to go away any time soon. According to the latest report from San Diego Association of Realtors, in San Diego County, inventory levels were down 18.8 percent in February 2016. The property type that lost the least inventory was the Single-Family Homes segment, where it decreased 16.2 percent. That amounts to 2.2 months supply for Single-Family Homes and 1.6 months supply for Condos – Townhomes.

Pending Sales in San Diego County were up 10.0 percent overall. Days on Market decreased 21.6% overall. Desperate home Buyers are snatching up homes when they are listed. It is not uncommon to receive 10-20 offers in 10 days on one property when it is marketed correctly. In some cases all are over the asking price.

The price range that tended to sell the quickest was the $250,001 to $500,000 range at 34 days; the price range that tended to sell the slowest was the $1,250,001 Or More range at 62 days.

The overall Median Sales Price was up 5.9% $468,000.

New Foreclosure Listings in February increased 1.2 percent to 526 properties. Inventory of San Diego Foreclosure Properties are continuing to steadily decline.

Interest rates are still well below their long-term averages. Mortgage rates continue to astound below 4.0%.

While it is still a great time to buy a home in San Diego, with inventory levels remaining lower, there simply aren’t as many homes to choose from on the market today. Home buyers need to work with a great buyer’s agent directly to get active listings from the local MLS. You cannot search all the homes on MLS on 3rd party real estate websites such as Zillow, Trulia, Homes.com (only a licensed realtor who is a member of local MLS can search all the homes on MLS). With such tight inventory, you do not want to miss any homes on the MLS. Also, it is a good idea to ask your agent to search some off-market listings (Cancelled Listings, Expired Listings, etc).

If you’re thinking about buying a home in 2016, give us a call 619-663-7139. Our trained agents specialize in the San Diego real estate market and are prepared to find the right home and get the best price.

ABOUT THE AUTHOR

KELLER WILLIAMS SAN DIEGO - THE MY HOME TEAM

Mark Kunce CA BRE #01458113

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Keller Williams San Diego Metro - The My Home Team. San Diego Real Estate Agent. Keller Williams Real Estate Agent. Keller Williams Cultural Icon. San Diego REALTOR®.

Why San Diego is one of the best place to buy Investment Property

7 Reasons Why San Diego Is one of the best place to buy Investment Property

1. Rentability

It is a great time to be a landlord but horrible time if you a looking to rent in San Diego. Vacancies are at the low rate of 4.1 percent for San Diego County. If your rental property is in fairly good condition and priced right, you will get multiple applications.

2. Rising Rents

According to an analysis of rental prices of single family homes by real estate data provider RentRange, San Diego ranked the 10th place where rent is growing the fastest. Rents in San Diego increased 13.6% between the third quarter of 2014 and the third quarter of 2015. The San Diego County Apartment Association reported even higher rent increase, 20% up over a year ago, 44.6% up from 2005.
Rental prices nationally have grown at roughly twice the pace of average hourly wage growth, which was a paltry 2.1 percent over the past year. Rising Rents means better cash flow.

3. Rising Property Value

San Diego County home prices rose 0.6 percent between August and September, and are up 6.6 percent since September 2014, according to the Standard & Poor’s Case-Shiller Home Prices Indices. The monthly rise was one of the fastest among 20 large real estate markets included in the indices, while the annual climb ranked seventh. The indices were created by taking the cost of housing in each market in January 2000, assigning them a value of 100, and tracking the subsequent rise and fall. San Diego’s mark in September was 216.62, reflecting more than a doubling of home prices in nearly 16 years. The rate of increase is the nation’s second fastestbehind Los Angeles.

4. Population Growth

Population growth is a significant factor in the rising demand. The county’s population grew by an average of nearly 33,000 people annually over the past two years, according to the San Diego Association of Governments estimates. Some of this is natural growth — more births than deaths — while some of it is probably also driven by new employment opportunities that have attracted new residents from out of town. The California Department of Finance predicted that San Diego County’s population will grow by 31 percent to hit 4.07 million people by 2060 (. Due to the lack of available land to develop, I do not see the kind of overbuilding that is expected in several other same-size metropolitan markets.

5. Short-term Vacation Rental Opportunities

With over 12,000 short term vacation rentals in the area, San Diego is rapidly becoming the fastest growing market in the country. According to Pillow, Short-term Vacation Rental Investors could be earning thousands more from their rental property. One beach community short term average rent is $4896, compared with only $1761 for long term rents. However, cities and communities in San Diego County have passed or will attempt to enforce restrictions on short-term rentals. If you are a Short-term Vacation Rental Investor, you have to pay attention to new regulations.

6. Out-of-town Investor Friendly

One of investors we know could not resist to purchase a Fixer house out side of California because it was so cheap. He thought he could fix and flip it. It was an online auction, he did not have time to visit so bought it without seeing it. It turns out that this house is in the very high crime area. It is so high that no contractor or real estate agents would go there. In San Diego, we do have some areas that have higher crime rates than the others but not to this extent. We always advise you to get know the area before purchasing but not having too high crime area makes San Diego out-of-town investor friendly.

7. Climate

San Diego has on average 146 sunny days and 117 partly cloudy days a year, we enjoy mild, sunny weather throughout the year. Climate is so mild that many rental properties do not have Air conditioning, which is one less appliance to worry about. Hurricanes are very rare and heavy snow and ice are very very rare in the wintertime. From a real estate investor stand point, you can expect the life expectancy of exterior materials such as roofs to last longer. If you install a tank-less water heater and Drought-Tolerant Landscaping, you will have a relatively maintenance-free rental property. Although we do have some floods that damage the property now and then, it is easy to avoid those locations. Just ask the neighbors.

Do you think of any other cities good for rental investment? Leave a comment!

Mark Kunce - Keller Williams San Diego Metro - The My Home Team

100% Financing Home Loan in San Diego, Home Ownership Made Easier

For some borrowers, saving up 3% for a down payment is still a hurdle they can’t quite clear due to the rising rent (44.6% up from 2005, according to the San Diego County Apartment Association reports. CBRE projects rents to increase by more than 3 percent in each of the next three years, until slowing to 2.4 percent annually in 2020.)

However, we have teamed up with a Bank that has a new program… 100% Financing Home Loan in San Diego (Zero-percent down mortgage).

This program is to help low- and moderate-income borrowers become homeowners by helping to overcome one of the “most significant barriers” to home ownership, the down payment.

It allows qualifying borrowers to finance up to 100 percent of a home’s value, with the bank contributing up to $4,500 toward certain closing costs.

Under this 100% Financing Home Loan program there are no private mortgage insurance, or PMI, requirements with a home mortgage, which can easily add $150 or more each month to the typical home loan payment.

To qualify for the program, certain eligibility requirements must be met. Those eligibility requirements include, but are not limited to (1) the property must either be located in a low-to-moderate income census tract (https://www.ffiec.gov/geocode/), or (2) the applicants on the loan cannot have an income greater than 80% of the HUD median income for the area. A lender credit not to exceed $4,500 will be applied at the time of closing, after final underwriting and product eligibility has been confirmed. (3) Minimum credit score of 620.

Other benefits of the program:

• Borrowers can move into a new residence with as little as $500 of their own funds. Seller funds and cash gifts can be used to pay remaining closing costs and so-called “prepaids” — expenses such as taxes and insurance that must be paid at closing before they are technically due.
• The program offers flexible fixed-rate mortgage terms, with 30-, 25-, 20-, 15- and 10-year options available.
• No income limits apply when the property is located in a Low or Moderate income census tract.

In some cases, borrowers participating in the program will pay a monthly mortgage payment that is as much as or less than what they currently pay as renters. And that’s an important point: This program will be helping people who’ve already proven their ability to make that monthly payment.
Contact us for details and complete eligibility requirements.

Mark Kunce

Keller Williams San Diego -The My Home Team

Easing of mortgage lending standards: Housing Bubble or No Bubble

Fannie Mae's third quarter 2015 Mortgage Lender Sentiment Survey™ reveals that more lenders report easing of mortgage lending standards across all loan types. Great news for home buyers.

For example, recently Chase Bank eased the lending requirements for its jumbo mortgages, which tend to be loans in excess of $417,000 in many markets and $625,500 in more expensive areas. A potential buyer now only needs a credit score of 680 and a 15% down payment to qualify for a maximum loan amount of $3 million for a primary-residence home. Borrowers used to need a 740 score and put 20% down. By easing its standards, the bank is hoping to gain more customers.

California is by far the biggest lending state when it comes to jumbo mortgages—both in dollar amount and number of loans. More than half of Bank of America’s jumbo lending is originated and closed in California, and dollar volume from January through August 2015 was up 20% over a year ago.

Fannie Mae announced its new HomeReady mortgage that will replace MyCommunityMortgage, Fannie’s previous affordable lending product. The latest product is designed to help creditworthy borrowers with lower and moderate incomes access an affordable, sustainable mortgage.

Easier credit may sound like a recipe for an automatic rerun of the housing crisis. Some critics express concern over a new housing bubble. But it’s still a far cry from the heady pre-crisis days where lenders would often waive downpayments entirely and not bother checking borrowers’ claims regarding their credit-worthiness. Unlike the catastrophic housing bubble seen at the start of this century, home price frothiness today is not being fueled by free and easy mortgage credit.

Are you concerned over a new hosing bubble? Should Mortgage Lending Standards Ease?