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October
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Newsletter Headlines Median price rises. For the full report with charts & graphs, and our predictions
for this year, The following is a long newsletter with lots of information and great links. Take a few minutes to read it or save it in your favorites for later. Is there a San Diego Real Estate Bubble? Local News for Buyers Interest rates just hit 6%. They are expected to go higher. A “small” increase in the interest rate, let’s say 1%, actually equates to a 14% increase in your monthly payment (1/7 = .1428). A $2000 payment becomes $2285.60. The other way to look at it is in price. If your lender says you can qualify for a $500K home at 6%, you will only be able to qualify for a property of $428,600 at 7% with the same payment. That is a huge difference! The inventory has increased from last year so it is easier to find the right home. Multiple offers are still showing up on some new listings if they are priced correctly, or in areas with a shortage of homes for sale. Number of re-sale houses & condos available in San Diego County is increasing. We are now at 14,881 on 10/13/05 compared to 14,151 on 9/11/05 and 12,204 on 7/11/05. The number of properties going into escrow dropped to 5520 from 6514 and 5901 in the same time frames. Last year at this time, we were at 10,528 houses and condos on the market and 5619 in escrow. This is the reason that prices are flattening. More inventory and about the same number of buyers. This is creating a buying opportunity. We normally see the peak of inventory around this time of the year. We also see the numbers of buyers and sales starting to reduce as we head into the Holidays. With interest rates increasing a little and the threat of more increases in interest rates, this could be a great time to buy. Should
you Buy Now or Wait? Higher inventory in many areas is giving buyers time to look around. Buyers do not have to make an immediate decision on a property unless it is new on the market and/or priced right. The market is still gaining in price in many areas of San Diego, but not as much as in previous years. The key to future price increases is in the interest rate. We have had a wonderful long run of historically low interest rates. This has allowed prices to rise and yet the home payment has remained relatively level. The lenders are continually developing many new programs that allow buyers to get into homes that they would not have been able to buy previously. Call me to get started now at 760-436-0087. New loan programs are being released: 30 or 40 year amortized loan with the first 10 years at interest only! Conforming loan guidelines are being increased to about $370K, which will help buyers in the lower price ranges or those with smaller down payments. Please contact me for a referral to a great lender. Here is what I
can do for you, the buyer: Please call me at 760-436-0087 or view available
homes on my site at: Local News for Sellers The market has slowed and the incredible appreciation we have seen over the past two years appears to have leveled off. If you price your home in anticipation of 1-3% appreciation a month, it will be sitting there a long time. Market time is increasing. Many sellers are reducing their prices in realization of the need to be competitive, in light of the increasing inventory. The number of buyer showings is down in many areas. We are about even between a buyers & a sellers market in much of the County. It is expected to stay that way as long as interest rates climb slowly and stay below 7%. Where we go from here depends on inventory levels and interest rates. Right now, inventory is up significantly, which gives buyers more time to compare your home to others. It is also causing the marketing time to increase by 58% over last year. Some areas are going up in price and a few are flat or going down in price. Sellers have to price their properties right because buyers have time to compare. A property should be in top condition when it goes on the market. This is imperative, especially the front yard and the entrance. First impressions are critical. Contact me for "40 Free or Inexpensive Tips to Make Your Home Show Better and Put More Money in Your Pocket." Kenneth Harney had an interesting recent article about sellers getting stuck on a price and getting less than they could. That is currently possible in some areas of San Diego where the inventory is ahead of the buyers. http://www.signonsandiego.com/uniontrib/20050904/news_1h04harney.html Call me to discuss:
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