Tuesday, December 4, 2012
The San Diego housing market is showing signs of a revival. One indicator is the return of the first-time homebuyer.
SAN DIEGO First-time homebuyers are scouting for homes in San Diego County, offering another sign that the real estate market is on the upswing. Sales and prices rose steadily through 2012 as a fledgling economic recovery took hold.
A modest La Mesa house has captured the eyes of Rene Gentry and Joshua Peralta.
"We have a decent little private driveway. No garage," said Peralta.
"I like the rock pillars over there," chimed in Gentry.
The couple plans to marry in March. A new house would allow Gentry leave behind her parents' home and allow Peralta to move out of his studio apartment.
"I like the red door," Gentry said as she walked in the front door.
"Lucky red door," added Peralta. "It looks like a rising sun."
Gentry works in administration at a La Mesa school. Peralta is a firefighter. Even with two incomes, their budget for a house peaks at $350,000. However, this three-bedroom, two-bath house fits their lifestyle and aspirations for a larger family.
They thought finding a house that fit their hopes would be tough, but they didn't expect the competition. San Diego has very active investors and cash-only buyers. That usually means multiple bidders on a home.
"We have a very low inventory and a great buyer demand," said Leslie Kilpatrick, president-elect of the San Diego Association of Realtors. "So that is one of the primary things that's affecting the market, especially for the first-time homebuyer."
Kilpatrick thinks a lot of first-time homebuyers are taking a serious look at the housing market.
"While there are people that were hurt during the recession and the meltdown, there are people who have been working, and saving and are waiting," said Kilpatrick. "And now that the interest rates have come down to make the price affordable per month, they're able to get into the market."
A recent San Diego Association of Realtors seminar had to be moved to a larger venue because the interest was so strong. Realtors and bankers gave more than 170 people tips on financing and house hunting.
"People are feeling more confident about both where the market is and I think more broadly about where the economy is," said Michael Lea, director of the Corky McMillin Center for Real Estate at San Diego State University.
Optimism is stoking interest among first-time homebuyers who've been waiting out the economic downturn.
"People have been deferring either moving into owner occupation or even moving out of their parents' house," said Lea. "And a combination of historically low interest rates and kind of a view that we have hit the bottom and prices are beginning to rise, saying this is the time that we should be thinking about buying."
There are still some negative pressures on the market. Dataquick tracks local housing trends and the real estate firm found foreclosures are declining, but remain at historically high levels. The group also said the number of short sales is up, indicating some stress in the housing market.
"I think we're probably a year or so away from feeling comfortable there and that's reflecting the fact that we still have about 25 percent of households with a mortgage here that are underwater," said Lea.
A recovering economy will go a long way toward fixing those problems, according to Lea, and the local housing market could serve as one of the engines of that recovery.
Joshua Peralta and Rene Gentry made a bid on the house they were touring. Another bid was accepted and their offer is second in line. They said they are hopeful but realistic about their prospects to land the home.