As 2022 gets started, the low inventory of homes for sale in San Diego continues. The dramatic decline in supply over the last 24 months has put a squeeze on home buyers who have had fewer and fewer homes to choose from. Home buyers are experiencing challenges with house hunting and encountering fierce competition when one that fits their criteria does come on the market. Only serious, well prepared, aggressive buyers with solid financing and savvy agents are winning the bidding wars right now. The casual buyers with no loan pre-approval, no agent helping to prepare them for making an offer, and are “not in a rush” basically have no shot.
On the surface the real estate market seems to be great for home sellers with prices being so high. However, the problem of low inventory is impacting sellers as well, due to the fact that many of them need a place to buy in order to be able to sell. If a family wants to sell their current home and upgrade into a larger home, there are simply homes on the market for them to upgrade into so they hold off on putting their home on the market. Thus creating a vicious cycle.
Another element adding complexity to the market are the cash investors that are participating in these bidding wars. This is highly unusual compared to normal investor behavior. Typically cash investors are bargain hunters who expect a discount off the list price because their cash offer comes with no loan or appraisal contingencies and a quicker close. Not in today's market. These investors are perfectly fine bidding up the price and being the high offer in order to get the property.
Although mortgage interest rates have been climbing up recently, they have been historically low and have allowed home buyers to make higher and higher offers which has contributed to higher prices. This might be coming to an end however in 2022. The Fed has outlined a plan to increase interest rates this year, so there could be some impact on the amount buyers can borrow, possibly cooling down prices. The bond market is likely to see some volatility this year as the Fed tapers its asset purchasing and tries to rein in inflation. Bottom line is rates are probably going up this year and that will have an impact on the real estate market.
If you need to buy or sell a home this year, we recommend consulting with a reputable lender and an experienced real estate agent. SDLookup Realty is a local independent real estate company that helps people buy & sell homes all throughout San Diego county. We would love to discuss your real estate goals and see if we are a good fit to help you. So Contact Us today!
On November 3, 2020, California voters approved The Home Protection for Seniors, Severely Disabled, Families, and Victims of Wildfire or Natural Disasters Act. Otherwise known as Proposition 19. Prop 19's provisions have become operative on February 16, 2021 (for intergenerational transfer exclusion) and April 1, 2021 (for base year value transfer).
The simple explanation of Prop 19 is it allows homeowners over the age of 55 to transfer a lower tax rate when they sell one house and buy another, provided they meet certain criteria. Severely disabled persons and victims of natural disasters are also eligible.
This means if you are over 55 years old and want to downsize into a smaller home or relocate to be closer to loved ones, but are concerned about the tax implications, there may be a solution for you.
Here are some of the main points to know:
If you are over 55 years old and want some help selling and buying a home
SDLookup Realty can help.
Contact us for a hassle free consultation and see if we are a good fit for your real estate needs.