Some of my clients say the bottom is in 6 months from now “ which is when they will buy. Ironically, other clients of mine told me the same thing 2 months ago, 6 months ago and even a year ago. Everyone has their own opinion and everyone buys at different times. The only true way to pinpoint the bottom, is to wait until youve passed it and bitterly look back at when you should have bought.
Do I think the market has hit the bottom?
Yes and no. Im not saying that just to be safe, or because Im afraid to be wrong, rather because its a complicated question. Its a question that can only be answered after getting some specific questions answered first.
When I work with a client, I focus on their wants and needs “ not someone elses. So when someone asks me if they should wait to buy, I ask them some questions:
Why do you want to buy? Investment? Second home?
Where do you want to buy? What building?
What price point are you looking at?
I believe that certain buildings will hold their values and not drop in price “ especially specific floor plans and certain levels(higher floors obviously). Other buildings and floor plans wont do as well and I think buyers should wait if they can and want to.
Ultimately, it depends on the buyers situation and wants. Financing also plays a major role in timing “ many loan programs will require more money down as time goes on. The feedback I get from my lenders now, is that if my clients with little money down(5“10%) are looking to buy, they better get on it before those loan options disappear.
Now I will probably get in trouble for saying this, but oh well. I believe that telling my clients the truth and only giving advice that I actually believe in, will pay off “ even if my honesty costs me a few sales. But getting back to my pointif youre thinking about buying at Electra, you should wait(with a few exceptions). I believe that there will be a lot of units hitting the market and prices will be forced down. Ill save my thoughts for another post, but if you have questions, let me know.
Generally speaking, I think prices are pretty stable and while theres always that chance that they may slip slightly, it might not be worth the wait if youre not an all cash buyer. So if you see something you like, why take the gamble?
Max Jarman of the Arizona Republic recently wrote an article titled Time is Ripe to Buy in San Diego. To sum it up, Jarman refers to some Downtown condos that were purchased in recent years for much more than what theyre on the market for today and that as inventory rises, so do the number of foreclosures. As a result, buyers are able to capitalize on a slower market and lower prices, making it a great time to buy.
Is Jarman correct in his analysis? Yes, home prices today are about what they were 2“3 years ago. Yes there has been an increase in foreclosures and short sales. Is there a lot of inventory? Not really. Today, February 13th, Sandicor(San Diegos MLS) shows that there are 582 properties for sale in Downtown San Diego. This number is primarily resale units, but there are some new, developer sales included as well. In recent years past, this number was closer to 600“700 condos for sale.
Downtown San Diego is young. Eric Martin, a VP of BOSA Development, has referred to Downtown San Diego as being young and in its teenage years. In the year 2000, the 92101 zip code had about 10,000 residents and since then, Downtown has grown to about 32,000. This number is expected to rise to 90,000 by the year 2030. There is a lot of development going on, but when you break it down, its really not that much. So no, Downtown San Diego is not over built.
Jarman indicates that the peak of the market was in late 2006, but it clearly peaked long before that “ closer to 2005, or even late 2004. Regardless, prices are lower today than they have been in the last few years, providing buyers some really good opportunities. Theres no doubt that theres a lot of controversy in todays market, but as I pointed out to one of my clients last week, when the market is looking really bad(for sellers), its looking really good for buyers.
And one last thingwhen you hear about prices dropping and so forth, are those list prices? Or are those sales prices? Id be willing to bet that the media, or whoever it is, is talking about sellers and their asking prices. Yes, those are dropping, but only because sellers are unrealistic to begin with and their agents arent good enough, or brave enough, to tell them what they need to hear. I guess the moral of the story is, take everything with a grain of salteven my stuff.
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