Tell Me, Now Really, Could it Be? Is San Diego Real Estate in Recovery?
May 23rd, 2010 by Kathleen Behrens
Houses for Sale in San Diego - The drop in the overall affordability of homes in San Diego County and the decline in San Diego property tax reassessment requests are two more signs which indicate the San Diego real estate market has bottomed out and is beginning to recover. The National Association of Home Builders attributed the decrease in the affordability of San Diego homes to the sale of higher priced homes in the San Diego real estate market. The sale of San Diego properties with higher values has driven up the median price for San Diego homes. During the recession, San Diego homebuyers predominantly purchased houses for sale in San Diego with lower prices. The sale of San Diego homes in higher prices ranges is a positive sign, which indicates the San Diego housing market has been improving.
Out of 225 U.S. cities, San Diego was ranked as the 11th least affordable city in which to own a home. Over the last 10 years, San Diego’s best ranking was during the third quarter of 2008 when it ranked 31st in terms of affordable housing. Eight of the eleven least affordable cities for homeownership were California cities. Demand for housing in California frequently outpaces the supply leading to increased home values. San Diego homeowners will continue to benefit from the law of supply and demand as the growth of the San Diego population surges past the rate of new home development.
Another recent statistic which indicates the San Diego housing market has hit bottom is the decline in San Diego property tax reassessment requests. According to the San Diego County Assessor’s Office, there has been an 88 percent decrease in the number of San Diego homeowners who have requested a reduction for the assessed valuation of their San Diego homes. Homeowners pay property taxes based upon the assessed value of their homes. Therefore, it is in their best interest to request a reassessment when the market value of their home has dropped.
In 2006 there were less than 100 requests filed. Then San Diego home prices plummeted by 46 percent. According to MDA DataQuick, the median price for a San Diego home in November 2005 was $517,500. By January 2009, the median price for a San Diego home had fallen to $280,000. During that year 56,140 San Diego homeowners filed new requests to have the value of their San Diego homes reassessed. In April 2010, the median price for a San Diego home rose to $325,250. So far this year 7,000 San Diego homeowners have requested a reduction in the assessed valuation of their San Diego homes due to a decline in market value.
If you think your San Diego home may qualify for a reduction in the assessed value, you still have time to apply. The County Assessor’s Office has extended the deadline for filing a request from May 14, 2010 to June 1, 2010. Appeals may also be filed from July 2, 2010 to November 30, 2010. If you plan to file an appeal, please note you must pay your San Diego property tax bill in the meantime until your appeal has been granted or denied.
With San Diego home values showing signs of stability and upward movement, now is an excellent time to enter the San Diego real estate market. The desirability of living in San Diego will ensure increased demand for San Diego homes. As demand outpaces supply, the value of San Diego homes will continue to rise. First time and repeat San Diego homebuyers who act fast may also be able to take advantage of the $10,000 California tax credit in addition to securing low interest rates and prices on houses for sale in San Diego.
However, the California tax credit is available on a first come, first served basis. $100 million has been allocated for each group of buyers. The funds for the first time homebuyer program are rapidly depleting. As of the 18th of May, 4,830 first time homebuyer applications had been received. According to the California Franchise Tax Board website and a representative with whom I spoke on May 20th, it is estimated approximately half of the $100 million first time buyer credit has already been claimed.
If you hope to claim the $10,000 California tax credit, there is no time to lose. In fact, it may already be too late for first time homebuyers. The number of application received skyrocketed from 430 as of May 4th to 2,470 as of May 11th. One week after that, the number of claims nearly doubled to 4,830. At this rate, it seems likely the entire first time home buyer funds will be claimed by the end of May. However, the outlook is much rosier for repeat buyers. The California Tax Board does not anticipate the need to track the figures for repeat buyers until July.
However even without the tax credit, San Diego is still a buyer’s market with record low interest rates and low home prices. If you are ready to enter the San Diego real estate market, you can begin your search of houses for sale in San Diego by searching the San Diego Multiple Listing Service (MLS) on your own, or contact San Diego Realtor and Broker Russ Petrone of Petrone Properties at 858-259-1000 to have a customized search of the homes for sale in San Diego created for you based specifically on the criteria you require for your San Diego home.