Many residents of San Diego are concerned about dropping house prices. After all, depending on how far into your mortgage you are, if your home loses a significant amount of value and you can’t sell it for as much as you need to, you could find yourself unable to purchase the new property you need. In some instances, if you only put a very small down-payment on your initial property purchase, you could even end up owing more than your home is worth. This is known as negative equity.
If you are in negative equity and you need to sell your home, you become responsible for making up the difference between what you owe on your mortgage and the amount you make from the sale. Your lender/mortgage provider also has to give you permission to arrange the sale.
Fortunately, contrary to what you may have heard, home prices in San Diego are not dropping. Far from it. It is actually the number of home sales that have been completed that has dropped dramatically during the last twelve months – something which experts agree has been largely driven by the combination of increasing house prices and rising mortgage rates.
A report by CoreLogic found that home sales fell almost 18% between September 2017 and 2018, which was the largest drop in sales the San Diego housing market has seen for any month in the last eight years. The sale of new-build homes has been equally as affected, with sales of newly-built homes in Southern California being 46.6% below the September average since way back in 1988.
Rising house prices in San Diego are one of the key reasons driving down sales as people are finding it harder to afford the monthly mortgage repayments on these more expensive homes. The median home price in San Diego County was $575,000 in September 2018, which had increased almost 8% from the median home price in September 2017.
These rising prices have caused the market to slow, making things significantly more difficult for sellers, particularly those whose home would ordinarily be an ideal first-time purchase, but its value pushes it beyond the budget of most new homeowners. However, what this does mean is that it is a good time to try and get a deal on your San Diego property. If you do have the finances in place, there is a larger selection of homes available and sellers who are more likely to negotiate to secure a sale on their property.
While there is nothing to stop you undertaking your own property negotiations, a professional realtor is an incredibly valuable asset to have. With plenty of negotiating experience, in addition to a unique knowledge and understanding of the local housing market, your realtor is best placed to help you decide what constitutes a reasonable offer and will deal with the vendor on your behalf. This removes much of the stress of negotiations and will help ensure that you aren’t left out of pocket.
If you are thinking of purchasing a property in San Diego, or you have a home to sell, our team of expert realtors will be delighted to help ensure you get the deal that you deserve. Please contact our offices to schedule your confidential appointment.