This year will see a recovery and stabilization in the market conditions. The factors determining the San Diego real estate are mentioned below:
1) Mortgage rates will drop, Rise and Stabilize
Mortgage rates will hit the lowest in the beginning of the year, while rising towards the spring and stabilizing in the later half of the year.
2) Investors will strike back
With the Fed planning on pumping up the market by buying bonds worth $100 billion dollars and 0.5 trillion dollars of mortgage backed securities of Fannie Mae and Freddie Mac, investors are bound to bounce back. Then again, low mortgage rates and house prices will also tempt the investors into moving back into action mode.
3) Creative Sellers
Sellers will provide creative financing schemes such as interest rate buy downs, seller financing and other incentives to attract buyers.
4) Decline in the Listing Inventory
As the buyers bounce back, the listing inventory will decline. The other reason for the same is that the builders have been focusing on selling the existing inventory instead of developing more. Therefore, with the inventory of new home being put on halt, the total house sin the inventory will also reduce.
5) Decline in the Market Time
Will lesser inventory and lucrative offers and deals, the market time of any property will decline.
6) Lesser Real Estate Agents and Builders
The crisis in the real estate market has had its impact on the real estate agents as well who were not able to sustain in the declining conditions. Hence, this year will see lesser real estate agents in the playing area. Those who did remain will thrive towards the end of this year. The same goes for the builders as well. Builders will be using auctions to get rid of the existing inventory, while not developing more due to lack of funds in the past year. Many will leave the grounds altogether, as the new construction gets halted.
7) Less or No Appreciation
For those looking for appreciation, this year will be a disappointment. While there will be no or bare appreciation, the market will stabilize nevertheless, while only a few markets might see decline before stabilization happens.
Rental Boom
As more properties are foreclosed in the present year and home owners lose their way, they will all turn to becoming the renter population, thus bringing in a rental boom. Even the banks will move towards renting their property instead of selling at loss.
9) In Demand Homes a Hit
Green built, smaller and energy efficient units will see more demand. Proximity to work and schools and connectivity will be one other major factor driving the sale of a home. Mid range houses will be more in demand.
10) Merging Real Estate Companies
Small real estate companies will merge with the larger ones, resulting in the shrinking of the competition in the market.
11) Second Homes Will Suffer
The second home markets will suffer as the owners face financial losses and depleting portfolios. Secondly, customers will be facing a need to relocate assets and financial priorities.
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