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[November 2017 Market Update] What You Need To Know About The San Diego Housing Market Right Now
November 4, 2017 | Bobby Martins
Hey everybody. Bobby Martins here with Bobby Martins Realty Group. I just wanted to give you a quick update on the market. I'm getting a lot of calls from clients, asking what's going on with things, they're seeing sales are down, but yet prices are up, and so they're having trouble figuring that out. So thought I'd do this quick video just to kind of give you a quick update on what's happened.
Right now there is a lack of inventory in San Diego. In fact this time last year we had 24% more homes on the market, than we do right now. Now that's equating to a 14% drop in the amount of sales that are happening. For a consumer like yourself it doesn't matter what the sales numbers are because what really matters is what's happening with prices, and prices have jumped 8% in the last 12 months. So the median price for a home has jumped. Even though the sales numbers are down, prices are going up because of the lack of inventory. The only reason why the sales are down is because of the lack of inventory.
If we had the same amount of homes that were on the market last year the sales figures would be up, because there's a very strong demand for homes on the market. I'm talking about the general market. High end homes, homes over $3 million, that market's pretty dry right now. There's not a lot of people making those moves, and I believe that's because of the proposed tax cut plan that's in place right now. Also people are just kind of seeing what's happening with the market and what's going to happen with these tax cuts. Now if you're an owner, and you're seeing these GOP tax cuts that are in the works right now, or being discussed, there's something in there that you really need to know about. If you're an owner currently you have a deduction on your loan up to $1 million. So you can deduct the interest up to $1 million.
They're proposing to change that number down to $500,000, which would mean ... That's a big difference in someone's yearly tax savings. So instead of being able to deduct all that interest up to $1 million, only up to $500,000. So I believe that's going to hurt the market, if that gets passed. I don't think it's going to get passed because they've tried this stuff before in the past, and the Realtor Association has great lobbyists. They will get this defeated. But it is something to think about if you're a homeowner, and you've been thinking about selling, if this does get passed, that's going to make, in my opinion, the prices on the higher end homes drop. When I say higher end, I'm talking like $800,000 to $1.1, $1.2 Million. Those homes are going to see the biggest effect on that.
Now the one really huge positive thing with the market is rates. Rates have been amazing, they're at 3.75% to 4%, depending on what your situation is. If you don't have great credit, it might be a little bit over 4%, or if you're buying a condo. But there's really good rate programs out there right now, and the good news is the banks are lending more. So it's a little bit easier to get a loan. You're still going to have to show everything. For your business owners, there are some loans out there where you can do stated income, but in general it's more difficult if you're doing stated income, and you're going to pay a higher rate. So If you can show the income on your Taxes, that's going to be the best way for you to do it.
Last thing I want to cover is rents. Rents are up 8% this year. That's a pretty big number. That's something to keep in mind. So prices of homes are going up, but rents are also going up, and the good thing about home ownership is you're fixing your payment. You know we always recommend doing a 30 year fixed mortgage. We don't recommend doing these 5/1 ARMs, and things like that. When you do a 30 year fixed, you know what your payments going to be for the next 30 years. If you're renting you know what your payments going to be for your lease only. At the end of that lease that owner can jack it up on you. That's what's happening all over San Diego County right now.
Hope you found this helpful, if you have any questions I'm always here to do free planning sessions. I sell all over San Diego County and our main niches are move up and move down buyers. If you are thinking of moving and would like to set up a free planning session, please click the link below: