Welcome to San Diego Blog | March 12, 2010
Time to Buy San Diego Real Estate?
If you’ve been holding off on a San Diego real estate purchase, talk of a rebound in the housing market may have you wondering if it’s finally time to make your big move. While home prices remain low, they’re no longer dropping like they were in the city of San Diego or in any of San Diego’s coastal communities.
Mortgage rates are historically low and the handsome tax credit that was offered to buyers last year has been extended to April 30 of this year.
San Diego’s housing market has shown signs of stabilization since early last year. Sales of existing homes bottomed out in August 2007, and the median home price reached its trough in February 2009. In January, California’s median home price was 17.2 percent above the low for the current cycle.
Can you really take advantage of the tax credit for a downtown San Diego Property?
Current homeowners who sign a purchase agreement to buy a home on or before April 30 get a dollar-for-dollar reduction on their taxes of 10% of the purchase price of the home, up to a maximum of $6,500 and first-time buyers can get up to $8,000.
But according to the National Association of Realtors, buyers spend about 12 weeks home shopping before making an offer, so if you haven’t already started looking, you will likely be pressed to meet the deadline.
The details state that in order to qualify for the full credit, your household income must be less than $225,000 if you’re married or less than $125,000 if you’re single. Repeat buyers must have lived in the home they are selling for five of the past eight years. The good news is that once you’ve signed the contract, you have until June 30 to close the deal.
Reasons not to wait until this summer or fall to buy San Diego Real Estate
On top of the loss of the tax credit, the biggest opposition facing buyers is a potential jump in mortgage rates. If the Fed moves ahead with its plan to stop buying mortgage-backed securities at the end of March, the rate on a 30-year fixed mortgage is expected to increase nearly a percentage point from today’s 5.18% to 6.1% by the end of 2010, according to the Mortgage Bankers Association.
On a $300,000 fixed-rate mortgage, that’s an extra $174 per month.
To get a handle on the direction of your market, check our market absorption rates to see whether inventory levels are increasing or decreasing in your price range. Even in markets that are recovering, sellers must price aggressively to make a fast deal. Refer to our market absorption rates above to figure out the chances of selling your home.
If an average of 4 homes a month have sold in your price range and there are currently 25 homes listed in your area and price range, then there would be a 6.25 month supply of homes. Your chance of selling in the next 30 days would be only a 16% chance. This is why it is important to price yourself aggressively in front of your competition.
If you would like to take advantage of the tax credits and today’s low intereste rates to purchase a home, vacation property, or investment property, give us a call today at 619-309-8011. Can you afford not to?