There has been a sea change in the local property market in vogue and according to a local mortgage lender the dynamic is changing in favor of buyers.
SAN DIEGO- There was one dramatic shift in San Diego’s hot real estate market and according to a local mortgage lender, the momentum is shifting in favor of buyers.
The Breakdown: Today vs. Last Year
Chad Baker is a mortgage lender with Mortgage across the country. He said if a house in San Diego County was priced right, it would be sold in less than 21 days.
But Baker said that for people who buy these homes, they are looking at housing expenses about 30% higher than when they might have been looking for properties a year ago.
Regarding interest rates which have nearly doubled this year, Baker said, “It certainly gives people pause. It’s starting to make people uncomfortable with the process. Basically, year over year, you’re looking at a mortgage that’s about 28% to 29% higher just depending on the interest rate situation. »
Baker says currently a mortgage payment on a $700,000 loan will be around $5,000 to $5,500 per month. Compare that to last year when that same $700,000 loan would cost you between $3,900 and $4,300 a month.
“There’s a certain darkness and also a lot of positivity,” Baker said.
Positivity because the market is moving, welcoming buyers. He said this week that a property in Encinitas that was listed for $1.9 million accepted a cash offer of $1.35 million.
That’s a reduction of about 30%. But Baker said it’s not just investors with cash who can do well in the current climate.
“Sellers are a bit scared. They would like to take their money off the table, take the risk off the table and as a buyer, if you can position yourself right, you can get a good deal,” Baker said.
Prices go down
According to the San Diego Association of Realtors, the median price for a single-family home in the county fell 5% last month to $910,000.
Baker points out that because rent prices have skyrocketed here, he thinks it’s better to buy than rent. Because even though home values will appreciate more slowly than last year, they are expected to increase by 6% this year alone. He said if you buy now, you can refinance later.
“I don’t think the rates will go back down to the 2s, but they will go down to a more manageable place, like in the 4s or 5s,” Baker said.
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