There has been a dramatic shift in the local hot real estate market, and according to local mortgage lenders, the dynamic is shifting in favor of buyers.
San Diego – There was one Dramatic change in San Diego’s hot real estate market And according to local mortgage lenders, the dynamic is changing in favor of buyers.
Breakdown: Today compared to last year
Chad Baker is a mortgage lender Cross Country Mortgage. If a home in San Diego County is priced right, it will sell in less than 21 days, he said.
But people buying those homes are seeing housing costs 30% higher than they were looking at properties a year ago, Baker said.
As for interest rates that have nearly doubled this year, Baker said, “It certainly gives people pause. This is starting to make people uncomfortable about the process. Basically year over year you’re looking at about 28% – 29% higher mortgage depending on where interest rates are.
A mortgage payment on a $700,000 loan right now would be $5,000 – $5500 a month, says Baker. That same $700,000 loan will cost you $3900 – $4300 per month compared to last year.
“There’s some darkness to it and a lot of positivity,” Baker said.
Positivity is because the market is changing, welcoming buyers. Just this week a property in Encinitas listed for $1.9 million received an all-cash offer of $1.35 million, he said.
That’s about a 30% reduction. But investors with cash aren’t the only ones to do well in the current climate, Baker said.
“Sellers are getting a little panicked. They want to take their money off the table, take the risk off the table, and as a buyer, if you position yourself right you can get a better deal,” Baker said.
Prices are falling
The median price of a single-family home in the county fell 5% last month to $910,000, according to the San Diego Association of Realtors.
Baker points out that because rental prices have exploded here, he believes buying is better than renting. That’s because home values, while appreciating more slowly than last year, are expected to rise 6% this year alone. If you buy now, you can refinance later, he said.
“I don’t think rates are going to go back below the 2s but they’re going to come down to some more manageable place like the 4s or 5s,” Baker said.
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