Navigating San Diego’s Real Estate Market: Pressing Forward in a Competitive Environment

In San Diego’s real estate market, some buyers are choosing to remain on the sidelines, hoping for a rollback in interest rates and prices. However, others are forging ahead, adapting to the new normal and reaping the benefits. Multiple offers, cash buyers, and homes selling above list price are still prevalent in the market. While adjusting to the changing landscape may be challenging, it presents opportunities for those willing to embrace them.

Seizing the Opportunity: Waiting for interest rates and prices to decrease often leads to unfavorable outcomes. Holding onto low mortgage rates may come at the expense of finding a home that provides the space or location needed to thrive. Recognizing that time is a precious commodity, many buyers are opting to purchase now and refinance later when rates potentially decrease.

Managing Higher Monthly Payments: To accommodate higher monthly mortgage payments, buyers are taking practical steps, such as reducing other expenses and purchases. They are factoring in potential wage increases and exploring options like borrowing cash from relatives or redistributing family estates. Some buyers even negotiate sale prices to offset a portion of the increased borrowing costs. Additionally, including furniture items in the purchase can help offset furnishing expenses.

Creative Deal-making: In a less competitive environment, creative deal-making can yield long-term benefits. While some buyers remain cautious, others are seizing the opportunity to negotiate favorable terms. They understand that adapting to the new normal might be painful, but it can lead to advantageous outcomes in the long run.

Future Outlook: Looking ahead to 2023, a modest recession is projected, with the Federal Reserve expected to continue raising interest rates. As the 2024 elections approach, political pressure may mount to reduce mortgage rates and inflation. Supply chain challenges and fluctuating gas prices contributed to inflation, while homeowner equity has nearly doubled over the past decade. San Diego’s residential construction may see a decline, but non-residential construction, including hospitals, life sciences, military projects, education, and apartments, will continue without interruption.

Navigating San Diego’s real estate market requires adaptability and a willingness to embrace change. While some buyers wait for favorable conditions, others are pressing forward, capitalizing on the opportunities available. Buying now and refinancing later, managing higher monthly payments strategically, and engaging in creative deal-making can lead to long-term gains. Understanding the future outlook and recognizing the value of homeowner equity can further inform decision-making. By embracing the new normal and taking calculated steps, buyers can position themselves for success in San Diego’s dynamic real estate landscape.

Minnie Rzeslawski has been both a real estate broker/ owner and investor for the past 34 years. She can be reach at Minnier@remax. net or (619) 804-5373 with any real estate related question. DRE#01019749

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