When Is the Right Time to Buy a Home in San Diego?
(this article was updated April 13th, 2022)
“Is now a good time to buy a house?”
That is the #1 question I get from clients and potential clients every year, no matter the market we're in. My answer always starts out the same way... “My crystal ball broke yesterday.” In other words, it’s extremely difficult to predict where home prices will be in the next 3-4 years, and even economists disagree about what the future holds for the housing market.
That being said, here are a few things to consider if you’re thinking about purchasing a home in today’s San Diego housing market...
A. San Diego has been experiencing a strong seller’s market for quite a long time. This trend has extended across many areas and price ranges, and although some of the highest-priced neighborhoods may behave differently, we are still seeing rising home values in many parts of San Diego, especially under $2,000,000. The rising market has been driven by a combination of low supply, low interest rates, and strong demand, all of which have driven home values up.
B. Of course, it’s ideal to perfectly time the market when buying a home in order to purchase when prices are low and get the most bang for your buck (but most people who timed the market perfectly did it by pure chance). On the flip side, many buyers purchasing in a declining market are concerned about prices continuing to fall after they buy (which could obviously impact their home’s resale value).
C. Current interest rates are around 4.75%, which is still historically low. Interest rates ranged from 10-15% during the entire 1980's. A more normal range is around 5.5-6.5%. As interest rates rise, it will affect what people can afford, and eventually rising rates will contribute to home values leveling out or declining. The time you DON’T want to buy is when both interest rates AND home prices are high (unless you really need a place to live and you’re planning for the long term). But these things can be difficult to predict.
So when is the right time to buy a home?
To me, it comes down to these four questions:
1. Can you afford it?
2. Can you find a home that you love in your price range?
3. Do you have options for what to do with the property long term (because if you know you will need to sell it in one or two years, you may lose money)?
4. Does the purchase fit with your long-term financial plan?
There is no easy, one-size-fits-all guide to the right time to buy a home in San Diego. But if you answered “no” to any of those four questions, renting may still be your best option. And there is nothing wrong with renting! Read my article about the top five reasons to rent in San Diego.
If you answered yes to those four questions, then NOW may be a good time for you to buy - no matter what is going on with interest rates or home values. I recommend that we meet for a Buyer Strategy session in which we can discuss your specific situation, what you’re looking for in a home, and how I can help you.
Also Read: Is Now a Bad Time to Buy a Home in San Diego? (Part 2)
Also Read: What is a Buyer Strategy Session?
Also Read: What is an Exclusive Buyer Agent?
Also Read: How Does a Buyer's Agent Get Paid?
Also Read: Is San Diego a Buyer's Market or Seller's Market?
Justin Gramm is the founder and principal broker of Globella Buyers Realty, your San Diego Exclusive Buyer Brokerage.
Exclusive Buyer Agents do not list homes for sale and never represent sellers. They have no "inventory" to try to sell you. They can represent you in purchasing any home. They are specialists at representing buyers only on the buyers' side of the transaction. Exclusive Buyer Agents work to get buyers the best price and terms when they buy a home.
If you have excellent credit and plan to buy a home or condo in San Diego County within 90 days, contact Justin Gramm to hire an agent on your side of the transaction. Call Justin at 858-437-2662 or Email.