Thursday, 2 Jul 2009
San Diego Sees Stabilization in Real Estate Pricing. The National Association of Realtors® has been running advertisements nationwide advising buyers that this is a fantastic market in which to purchase a home. San Diego, one of the first areas of the country to experience mass foreclosures is certainly ripe for the picking. Not only have prices rolled back to 2003 levels, but recent indications are that the market has bottomed out. San Diegans, don’t let this bear market in housing pass you by. We were one of the first to fall and will be one of the first to rise, and who doesn’t want to be on the upside of what will become a bull market in real estate?
First, let’s look at the market: there are currently enough condominiums available for under $100,000 and a surplus of homes available for under $200,000. That makes buying a no-brainer as opposed to renting. Investors are yielding positive cash flow with 20% down payments, an opportunity not seen for over ten years. So, is real estate in California in recovery? The median sales price is down 22.04% from a year ago, but off just .5% from February, MDA DataQuick® of San Diego reported in mid-April. That certainly seems like a buyers’ market, not to mention the many distressed, bank-owned properties that banks want off their balance sheets.
Enticing as that is, the Federal Government is throwing in their two cents—$8,000 actually—by offering a tax credit for new homebuyers. The rules dictate that you must be a first-time buyer or that you have not owned a home for three years in order to qualify for the $8,000. In some cases, this credit will actually exceed the 3.5% down payment required by an FHA loan. Buyers must close their home by November 30, 2009 in order to receive this credit. Not to be outdone, the State of California is putting up a $10,000 tax credit, to be used by March 1, 2010. This is available to all buyers, providing they purchase a newly built home. In both cases, the house, condominium, etc. must be the buyer’s principal residence. Coupled with the Federal tax credit of $8,000, home buyers can receive up to an $18,000 subsidy.
More good news: first-time homebuyers who lose their jobs due to layoffs may be eligible to receive up to $1,500 per month to help make their mortgage payments for up to six months, thanks to a mortgage protection program being offered by the California Association of Realtors®.
Investments in San Diego housing property will definitely help stabilize the market and keep local businesses thriving. Timing is important when purchasing a home. No one can predict how low the market will go, but there are some things we can predict. There is a limited amount of land in San Diego still available for development, the U.S. population is expected to increase by 100 million people by 2040, and those tax credits won’t be around forever.
If you’ve been thinking of buying a home and are concerned about San Diego’s economic health, you may find that the stars are now aligned for you. Between the State and Federal tax incentives, the benefit of having a mortgage to offset your annual taxes and the pride of ownership, the timing appears right for potential home buyers in San Diego.