San Diego Real Estate Patrick Belhon
Over the last few years, America has suffered from a tenuous housing market. When the real estate market crashed in 2008, the outlook was grim. Home values plunged, leaving people struggling to make payments and unable to sell their homes at a profit. Buying, selling and development came to near stand-stills while the market bottomed out. This was especially noticeable in once-lucrative areas like San Diego, where people had counted on home prices continuing to grow at an exponential rate. The crisis hit many cities in California hard, leaving many wondering if real estate would ever be the same.
Since then, the economy has seen its ups and downs, creating uncertainty about the prognosis of the market. However, over the first few months of 2013, all signs are pointing toward steady, healthy recovery in San Diego. For the first time since the housing bubble burst in 2008, experts are cautiously optimistic that the growth is indicative of better things to come, giving the average home buyer every reason to think about trying the real estate scene again.
One of the most promising signs is that home prices in San Diego have been rising consistently. In 2012, increases in home prices were slow but steady, suggesting a sustainable growth rate. The first two months of 2013 continued this increase, and in February, the median home price in the area was $359,000. Although this was only a modest gain from January, it also represents an 18% increase from median home prices in February of 2012. This impressive growth rate is the highest it has been since 2005.
This increase in home prices means that people are interested in buying again, which points to growing equilibrium in the real estate scene. Since 2008, sellers have been at a real disadvantage and many homeowners in the area have had trouble selling their homes at a profit. However, as home prices have continued to rise, selling has become a more profitable experience, giving homeowners more power and more equity to utilize. The easier it is to sell, the more likely people are to buy, which creates a cycle of continued growth that is likely to make 2013 one of the best years since the economy soured.
Home prices are not the only sign of recovery for the housing arena in the coming year. In addition to improved home prices, new construction has started to bounce back as well. For several years, home development slowed dramatically in Southern California and the rest of the country, but home construction companies started to show real growth by the end of 2012. Lennar Corporation and Toll Brothers, both of which have multiple development projects in the area, have reported continued economic growth. Toll Brothers even reported that contracts were up as much as 40% so far this year, which is a promising sign for overall recovery. These companies have been able to utilize the lower interest rates to their advantage, and as more people start looking to buy, demand continues to grow.
These positive signs should also be noted in context. Winter is traditionally the slowest time of year for home sales, which means that as spring turns toward summer, home sales are only likely to increase. The uptick in activity has everyone excited, giving buyers more incentive to shop and sellers more leverage as the housing scene regains more of its parity. Even so, buyers are encouraged to remain realistic about the process, and banks are still stricter with their lending procedures. Sellers have the most to gain from these increases, creating an exciting climate for the prime home buying season.
All of these factors considered, 2013 looks to be a promising year for San Diego housing.
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