SAN DIEGO — There's been a dramatic shift in San Diego’s hot real estate market and according to a local mortgage lender, the dynamic is changing in favor of buyers.
The breakdown: Today compared to last year
Chad Baker is a mortgage lender with Cross Country Mortgage. He said if a house in San Diego County is priced correctly, it’ll be sold in less than 21 days.
But Baker said for the people buying those homes, they’re looking at about a 30% higher housing expense than when they might have been looking at properties a year ago.
Interest rates
As for interest rates that have nearly doubled this year, Baker said, “It’s definitely giving people pause. It’s starting to make people feel uncomfortable about the process. Basically year over year you’re looking at about a 28% - 29% higher mortgage just based on where interest rates are.”
Baker says, right now a mortgage payment on a $700,000 loan will be roughly $5,000 - $5500 a month. Compare that to last year when that same $700,000 loan would cost you $3900 - $4300 a month.
“There’s some darkness to it and also a lot of positivity,” said Baker.
Positivity because the market is shifting, welcoming buyers. He said just this week a property in Encinitas that was listed for $1.9 million accepted an all cash offer of $1.35 million.
That’s about a 30% cut. But Baker said it’s not just investors with cash who can do well in the current climate.
“Sellers are getting a little spooked. They’d like to take their money off the table, take the risk off the table and as a buyer, if you can position yourself correctly you can get a good deal,” said Baker.
Prices are dropping
According to the San Diego Association of Realtors, the median price of a single family home in the county dropped by 5% last month to $910,000.
Baker points out, because rent prices exploded here, he believes it’s better to buy than to rent. Because even though home values will appreciate more slowly than last year, they are expected to rise 6% this year alone. He said if you buy now, you can refinance later.
“I don't think rates are going to come back down to the 2’s but they are going to come down to some place more manageable, like in the 4s or 5s,” said Baker.
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