Statistics – like Google, you can use it to pretty much find anything you want to find. You can find numbers that will suggest that the downtown San Diego condo market has bottomed out and prices are rising. At the same time, you can find other info that will suggest the bottom is no where near us….so what to do?
Here’s what I do know and doubt anyone can argue. Today’s real estate prices are lower than they’ve been for a long time. Some buildings you would never have dreamed about owning in, are now right at your fingertips, just waiting for you to pull the trigger.
Take for example, condo #2204 in The Grande North. This condo was originally purchased for $451,500 in 2005 from Bosa(the developer) – actually it’s more like 2004 since it was purchased pre-construction – and then sold in 2006 for $570K and now it’s listed at $415K as a bank owned property. In essence, this home is worth less than what it was 5 years ago!
Here’s another example. Renaissance condo #507 was purchased back in 2004 for $760K. Today it’s bank owned and listed at $424K! Not only has the value gone down by 45%, interest rates are about 1% lower! Think about it this way…your monthly mortgage payment if you bought in 2004, would have been around $4556.66/mo(that’s based on 100% financing at 6%). Today, you can own that same exact condo and only pay $2222.24/mo(assuming there was 100% financing at 4.75% – but really, if you can’t put enough down to get it down to a loan amount of $417K, you shouldn’t be buying a home). That’s $2334.42 dollars a month you’d be saving – that’s a 52% savings!
Now…if interest rates go up by 1% in the next year or so, you’re payments on this same condo would be about $2474.38/mo – an 11% increase. That might not sound like much, but look at it this way. With that same $2474/mo payment, today you could buy a home worth $475K – you’d have $50,000 more buying power.
No one knows what the real estate market will do, but we do know that some of the wealthiest people in the world got there through real estate. If you’re looking to flip property, now is not the market. But if you’re looking to hold for 5-10 years, I promise you’ll thank me when it comes time to sell and upgrade.
If you have any questions, or would like to hear about some great real estate deals, give me a call – Denny Oh 858–243–2092.