San Diego County's recent real estate performance is shaking real investor confidence but not for the reasons you might think…
We've all heard about the recent swarm of giant private equity firms descending on Phoenix and now shifting to Atlanta, buying up all of the properties they can. However, savvy investors are starting to question the media blitz focusing on these destinations when their stats don't back up the hype.
Cracks can be seen in the Phoenix market, where sales volume is dropping and low priced properties still remain unsold. It gets uglier when looking at the fashionable ‘hot spot' of Atlanta, where the latest S&P/ Case-Shiller Home Price Index shows home prices have actually dropped 6.1% in the last year.
According to this latest data release New York home prices have also continued to decrease and the devastating hurricane Sandy is only likely to make this worse by stacking up more foreclosures on top of a massive stockpile which is speculated to hold another 41 years' worth of inventory at the current pace.
Now compare this to San Diego County where foreclosures are now back down to the lowest since 2006, home sales volume is increasing by as much as 58.3% year-over-year in neighborhoods like Imperial Beach and prices have risen by over 20% in at least 19 zip codes. This includes Del Mar which has seen home prices shoot up by 77.7% for the 12 months up to September 2012.
There may be some sense in buying into other markets while they are down but there seems to be no question that the San Diego real estate market is on its game and plans to stay that way.
This is even clearer when you look at the validity of the San Diego housing recovery and how it is backed up by home buyers who are actually acquiring homes to live in or to at least use as second homes and vacation properties compared to places like Atlanta and Phoenix where it is all investors. We know how that played out last time around.
The bottom line? Those looking for not just great returns from the real estate market today but real security might want to take a serious second look at homes in San Diego…