5 Top 2009 Market Predictions in San Diego

I have been reading a lot of posts on predictions for the 2009 real estate market in San Diego.  As usual, there are many  opinions out there, some of them are optimistic, some funny, some neutral, and some just doom and gloom.  Everyone appears to be an expert with their own spin and logic to what clearly has been a huge reset of our markets.

The truth of the matter is no one really knows when the bottom will hit (or has hit) in San Diego.  If they have this ability to see so clearly into the future, then I would suggest they might want to spend their time buying Lotto tickets – the payoff would be much better.  Market bottoms can be clearly identified months after they have occurred by the reviewing of sales data and median prices by real estate experts.

Most of the blogs and news I have read are using a very broad brush when speaking of San Diego real estate.  I would first suggest that you consider our market as many smaller localized markets with different market realities.

For myself, I concentrate on the Downtown San Diego real estate market and most coastal markets up and down San Diego County including Rancho Santa Fe.  What is happening in Oceanside is quite different to what is happening in La Jolla, and certainly much different in the markets in East County.  If you want to know what is happening in your market place, seek out Agent experts that can provide you with local expertise on the market condition of your neighborhood.

Here is a list of the 5 top reasons that I am optimistic regarding the San Diego real estate market:

1. We will have a new president, regardless of your political views, that is committed to turning the country and real estate around.
2. Rates of conforming and non-conforming loans have continued to drop making monthly payments low.  There is talk of them getting as low as 4% on conforming loan amounts.  There have been huge changes in the lending industry and things have started to somewhat settle down.
3. In San Diego County the re-sale inventory continues to drop which is a sign that demand is whittling away the supply, and prices might be stabilizing.  The San Diego Association of Realtors said the inventory of unsold re-sales homes, including foreclosures, stood at 14,997 on January 16, 2009, the smallest since early 2006, as the housing market was cooling.
4. Affordability in San Diego is at an all time high for first time home buyers that thought they could never afford to own a home in San Diego.  Combine that with low interest rates and you really have a winner!
5. If you live and breathe real estate as I do, and you speak to others that do the same, you can always sense when markets are starting to improve – but be sure to see my disclaimer mentioned above – no one really does know!

This is a time to be prudent with your real estate transactions.  If you don’t need to sell, this probably is not the best time to be on the market.  If you are uncertain of your jobs future, then RENT!  If you have a good job and have been renting all of your life, this is a GREAT time to buy, just be careful, do your homework, and don’t overpay for the market.  We all know that real estate values go up and down over the years, but we also know that long term it is a hard investment to beat with the added benefit of living in it!

I am working hard on the numbers for 2008 in Rancho Santa Fe and Downtown San Diego.  I should have them finished and posted for your reading pleasure soon – for those of you that like numbers.