What will the impact of Obama’s re-election victory be on the San Diego real estate market? With 4 more years of the same policies we can assume we will see many of the same trends playing out as we have had a taste of recently, along with the effects of plans in the works beginning to take ahold.
How Has the California Real Estate Market Changed in 2012?
The new 2012 Annual Housing Market Study from the California Association of Realtors highlights how the market has evolved since 2011 and it’s all good news.
- Homes are selling twice as fast in 2012 vs. 2011
- More homes received multiple offers than in the last 12 years
- In 2012 property listings generated 4.2 offers
- 7 out of 10 distressed properties received multiple offers
- 41% of homes sold without price reductions
- Homes with equity sold in an average of 32 days in 2012
- 30% of home buyers have been paying cash, more than 3 x in 2001
Where is the San Diego Real Estate Market Headed for 2013-2016?
We should expect to see the above trends continuing through the next 4 years, as well as continued foreclosures, decreasing inventory and rising home prices. A surge in new construction and builder confidence also suggests more new homes, more tear downs and custom homes being built and commercial real estate analysts predict an average of 2,000 new rental units being added per year until 2016.
While we may be a blue state the California Association of Realtors seems unlikely to find their calls for a change of leadership and change in direction within the government to be heard. On Nov. 5th the Association publicly made a plea for change after the government went ahead with bulk REO sales to private equity, despite the current shortage of inventory in the state, saying “leadership has demonstrated a lack of understanding of the housing market”.
The fact that the government just doesn’t get real estate or how to fix it or at least isn’t seen as fixing it from an individual’s point of view also continues to be seen to be played out in mortgage markets but none of this appears to have the ability to slow down the strength of local real estate or demand for San Diego homes.
So What’s the Deal?
Tightness in inventory is likely to continue, but means pushing San Diego home prices up further and higher home values will result in more equity and in turn more inventory coming on the market.
Despite improvements in the market it is still an opportune time to buy a home in San Diego County for far less than in the past and for homeowners selling before the end of year isn’t just critical for those doing a short sale but avoiding the new health care tax on real estate which kicks in for 2013.