It’s hard for many prospective buyers of San Diego homes to believe this, but this really isn’t a traditional “buyer’s market” in many parts of San Diego. This is particularly true for “entry-level homes.” In America’s Finest City the entry level starts at around $350,000 and goes up to about $600,000. And buying a house in this price range isn’t as easy as you may think.
This week I’ve spent a lot of time helping clients who want to buy a newer home with at least four bedrooms. And I want to share with you a bit of our experience. It’s rough out there folks! There is a lot of competition for entry-level homes. There are multiple offers on most San Diego homes for sale in the $400,000 to $600,000 price range. The winning buyers are typically paying over asking price for the houses.
The “newer” homes (built since 2000) in this price range are mainly in South Bay and in parts of North County San Diego. San Diego beach houses are still starting above a million dollars. But for a spacious, four-bedroom house in a newer neighborhood, clean, well-appointed, and priced under $500,000 the choices are really limited to Chula Vista and Eastlake. There are some newer homes that fit this description in Encinitas, Carlsbad, San Marcos, and Oceanside, but the commute to downtown from far North County can be pretty daunting at times. Many people prefer the drive from South Bay.
Of course, some historical perspective is important. Most of the Chula Vista houses that are now priced at $400 to $600,000 have declined in value by as much as 40 and 50 percent over the past few years. So the idea of an “overbid” is relative. These market values are still bargain prices by recent standards. And Chula Vista / Eastlake remains a very attractive neighborhood. It has been recognized as the best master planned community in the United States, and for good reason. It really is a beautiful neighborhood with lots of wonderful amenities.
But back to the point I was making… Below you can see the recent sales of four-plus bedroom houses priced under $500,000 in Chula Vista zip code 92113 over the past six months. Notice the “Price” (i.e. the List Price in the Wide Column) and compare the “SP” (i.e. SOLD Price). You will be hard pressed to find many houses that have sold for under the list price. Practically all of the houses have sold at or above the asking price.
I had to break these screen shots up to accommodate all of the listings, but the overview is sufficient to understand my point.
With an average list price of $403,850 and average sale price of $408,882 it is clear that most 4-plus bedroom houses in this part of San Diego are selling over asking price. So if you’re looking to buy a house in this price range be prepared to get there early and make strong offers.
The good news is that when you have a good agent who is on the ball identifying the best properties as they hit the market, and using best efforts to negotiate on your behalf, you still have a chance to buy a house at a great price. It is important to be pre-approved with a reliable mortgage lender, and have an experienced agent on your side to make sure that your offers are submitted correctly the first time. My clients from this week are now in counter-offer stages and I’m very optimistic!
Let me know if you’d like to see the recent sales statistics in any other San Diego neighborhoods.