Playing the Home Buying Game in San Diego

By Anna Nevares, Redfin San Diego Area Manager

Another month, another chapter in the low inventory story in San Diego. A well-priced home barely has a chance to say hello to the market before a big “pending” banner goes over the picture on Redfin’s website.

Our agents here in San Diego have noticed that a lot of the bidding wars are coming from homes that are intentionally priced below their market value to spark that competition. So a home that the seller expects to fetch $500,000 might be priced at $475,000.

I’m telling my clients to be ready to play that game as well when deciding the most they’re willing to pay for a home. If you’re able to pay $500,000, try putting your cap at $475,000, since there’s a good chance you’ll be coming up against other offers. In this market of low inventory, it could be a while before another home comes along that you like as much. Sellers are intentionally pricing low, so savvy buyers are finding success by searching low.

You can download the full data set for the entire San Diego area here, but here are the big stories for the City of San Diego:

The drop in inventory gets steeper

Every time we think we’ve hit rock bottom on supply, the market picks up a shovel and starts to dig. With single-family, condos and townhomes combined, the number of homes on the market was 2,900 in March, down 16.7% since February and 49.9% from the previous March.

That’s 2.1 months of supply (the lowest in more than a year), where a balanced market is 5-6 months. Sellers, this is your time!

A couple of other indictors of the seller’s market here are the high number of pending sales, and the low number of homes taken off the market without selling. Both send a clear message: Sellers have the power in San Diego.

Single-family home prices drop, condos jump

Prices were a mixed bag in March, with single-family homes down, and condos/townhomes up month over month. The median single-family home in San Diego sold for $380,000 in March, down 2.3% since February, and down 7.3% from March of last year. Median price for condos was up 14.1% from February, but still down 2.5% from last year. Townhomes had a great month at $300,000 median sale price, up 21% month over month and breaking even year over year.

  • Iclaudius1

    This is such BS!!!! Let go of some of that “shadow”inventory. The Realtors are trying to convince the buyers that there is limited inventory!!! They are so hungry… It has made them crazy!!!

  • Sobmaz

    The housing crash has made lenders more responsible.  FHA now requires 3.5% down and you need a ridiculously high FICO score of 580 to qualify!   How much more stringent can it get?

    The good news, the new loans since 2008 currently have a default rate of 9.3%!     

    I am glad that we are out of the woods for housing.   People living 2 and3 years  without payments may be wide spread and because of that, shadow inventory will remain in the shadows.

    I am trying to start a club for those with FICO scores below 580.    I am sure the NAR will support our group.  We demand a chance at a loan and I am sure that with the sub580ers we could easily get that post housing crash FHA default rate up above 10%!

    • Vic

      You have a FICO score of 580 and you're demanding to be taken as a serious credit risk and in the same boat as me (someone with a score of 821)?! Earn your credit score, the way I did.

  • Elycee Ellington

    Mine is 800, with not much effort on my part, paying bills on time or early, paying credit cards on time or early.  Getting the high FICO score can mean making sacrifices. Something most people are not willing to do.

    I drive a 20 year old paid for car, but I can pay my bills on time. I have no cable, home phone or internet either. And just got a “smart phone” I am permanent debt averse. All those little bills add up fast. I can easily get a loan.

    You can't get a high score if you don't do the hard work. People with high FICO scores earn them the hard way. If you don't have credit cards, you have to get one, and be sure to pay it off every month.

  • Aberracasa

    Come on! Treat yourself! Have you considered 2-ply toilet paper?

  • http://mahoganyliving.com/ Jennifer

    Looking at the reports, seems like San Diego housing market experienced its down turn. Hopefully its starts recovering already.