San Diego Relocation Information

How’s the real estate market?

Well that depends – are you thinking about buying, selling, investing, or renting? I’ll answer that question in a minute, but first let me bring you up to date.

Crystal and I now work with Coastal Inland Properties, a small boutique real estate firm in Carlsbad. Our old RE/MAX broker gave up the franchise and so that gave us the kick we needed to join a company where we can market ourselves as a team.

We’ve moved several times in the past year, and we’ve learned some valuable lessons about downsizing and letting go. Most people have trouble giving something up even to gain something better, but it really is just a mental game and we know how to play it. The tendency is to get “stuck” in a certain way and let life shoot its arrows at you. I recommend you take inspired action towards you goals and not let inertia hold you back. Someday you may find yourself faced with having to choose between several bad options, and the tendency will be to stay frozen in place. But as you do nothing your options will disappear until only one is left, and that is usually the worst one.

With our last child out of college and living on her own, we are now free to concentrate on our own retirement accounts. A little late in the game, but we are moving forward. Of course the destruction of value in many of our real estate investments has caused us to rewrite the plan, but that is better than having no plan. How about you? What’s your plan?

Now let’s talk about the market.

If you’re thinking about selling, prices have been stable this past year, but it’s still a buyer’s market. That means this is not a time to be mediocre – you must be excellent with your marketing, condition, and price.  We now utilize every tool known to man for marketing property. Our sellers get exposure in all real estate websites, such as Craigslist, Zillow, Trulia, and many more. They get professional photography and copywriting that hits home seekers’ hot buttons and makes them want to see the home. “Cute 3 bedroom” is so last century and doesn’t work in this competitive market.

If you’re thinking about buying, it’s a great time to go shopping! Pricing is softer in the upper-end price ranges than at the entry level, but there is still flexibility in most prices. However, even though interest rates are at record lows, many people can’t qualify for a loan as lending guidelines get tougher all the time.  So our job is to make sure our buyers have rock-solid loan commitments before going house hunting so there are no big disappointments. There’s nothing worse than losing your dream home because of a bank screw-up. So once again, this is not the time to have a friend “write up the offer for you”. You must have excellent representation and we will put our 22 years experience to work in helping you navigate the bank minefield. 

If you’re interested in investing, people today no longer invest in the hopes of appreciation, but instead are looking for cash flow. And San Diego still remains one of the worst places for cash flow. The best cash flow in the county today is in the senior communities, where you can buy a half-duplex with no homeowner fees for around $150K and rent it to tenants 55 years of age or older for $1200 a month. This happens all the time right here in Oceanside.

Frequently I get the “what about REOs?” question, so here’s the scoop. Banks sell their properties on the open market at market value. Whether it is a REO or a short sale, it is not a bargain since they will only sell at what their appraiser says is market value. They will not sell it to you at 60 or 70 cents on the dollar. The only way investors are making money with distressed properties today is by buying them at the trustee sale. This is an enormously labor intensive business that requires investigating 100 defaulted properties to bid on 10 to buy 1.

And finally, what about renting? That is a good option for some, depending on the situation. Renting is less of a commitment than buying, so if you are uncertain about the next few years, renting is better. We have some clients who always wanted to live near the beach but didn’t know if they would like the crowds and the fog, so they rented there for a year. Why not? Home prices are not going up, so they can take their time and explore different options before committing to one.

But if you know what you want and expect to stay put for awhile, it makes sense to buy at today’s prices. There is a guideline in financial planning called the “rule of 15” to determine whether it makes more sense to rent or to buy. If home prices are less than 15 times annual rent, it makes sense to buy. So let’s say you would pay $2000 a month rent for a 3 bedroom house. $2000 times 12 = $24000 times 15 = $360K. That means if you could buy that house for less than $360K you would be better off buying. This is exactly what the prices are in Oceanside or Vista, where yes, today it does make more sense to buy rather than to rent.

So who do you know who is interested in buying, selling, investing or renting? As always, we are offering our best-reasoned, expert advice to you or anyone you know at no cost or obligation. Just let us know how we can best serve you, now or in the future.