San Diego Coastal Real Estate Resource

San Diego Real Estate Not So Gloomy for 2010

by Jeffrey on January 4, 2010

in Breaking News, Real Estate, Statistics

Real Estate home prices 48.4 percent higher than January 2000

According to an article yesterday by Roger Showley of the Union Tribune San Diego real estate is improving. This is particularly true if you have held your real estate investment long term in San Diego.

This means that many longtime homeowners are still sitting on big gains even after seeing the market skyrocket to a peak of $517,500 in November 2005 before plummeting.

Take the Krumweide family in University City. The family bought a 2,800-square-foot home for $432,000 in June 2000, took out a small amount of equity for home repairs when they refinanced and now could sell the house for about $850,000, according to their neighbor and original real estate agent, Ann Throckmorton.

“We’re just relieved we stayed with our guns, stayed with our heads,” Molly Krumweide said.

Of course San Diego is probably not out of the woods yet, but in my opinion the lower priced homes under $500,000 are in short supply and selling at or close to asking prices. Combined with historically low interest rates and tax credits – this is an opportunity for first time or move up buyer’s that may have thought they never could afford a San Diego home in the coastal markets.

Higher priced markets should be approached with caution, but consider purchasing quality and location and paying market price or below. I can’t remember a time when there were some really awesome deals on luxury properties in Rancho Santa Fe, Del Mar, Coronado, and La Jolla, like now.

What’s in store for the new decade — more boom and bust or a steady increase in values as supply and demand get back in balance?

Economists and market analysts who watched the decade’s gyrations can imagine both a worst-case scenario or a best-case outlook, but they stress the need to return to market fundamentals.

“Over the long haul, house prices can’t grow faster than people’s income,” said James Hamilton, an economics professor at the University of California San Diego. “Many people ignored that lesson over the last decade and paid a pretty high cost.”

If you are interested in investing in San Diego real estate I would advise caution and education. Probably 70% of the active inventory is overpriced, in poor condition, or a poor investment. Do your homework, find a real estate agent that will spend the time and effort bringing you up to speed on the market in your price range and location, and buy right. This is a recipe for success that will reap the longtime rewards of appreciation gain.

What do you think?

Photo courtesy of Flickr

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