Recession and San Diego Real Estate: What You Need to Know

By
Real Estate Broker/Owner with Steele Group Realty DRE# 01474222
https://activerain.com/droplet/5kGw

 

For those of us in the real estate biz, the mere mention of the word “recession” conjures up nightmarish reminders of overgrown lawns and boarded-up windows, foreclosures and short sales. Unfortunately, many economists believe that a recession is on the way between now and 2021, with most targeting 2020. It seems like we’ve barely recovered…would a new recessionary period be as devastating?

 

On the positive side…

 

-          Interest rates are likely to remain low and lower rates equal greater affordability, keeping more people in the market.

-          Today’s real estate market is better protected from speculation and risky mortgages. Plus, owners have greater equity which helps insulate them against foreclosure. It things get tough they can likely sell versus losing their home.

-          Housing demand remains high due to slow home building starts and the rise of millennials that are looking for single family homes to raise families.

-          Somewhat lower prices could expand the buyer base.

 

However…

 

-          The world economy will likely be a driving force of a recession, including our escalating trade war with China. Higher import costs passed to consumers means less money available to spend on housing.

-          According to some experts, prices could drop significantly, though not to the 50% level we saw in 2008. Sales could dip by as much as 10 – 20% in some markets.

-          There will be lay-offs and fewer jobs. If a two-income family becomes a one-income family that has a substantial impact on their housing budget.

-          Anticipation of a recession alone could persuade homeowners to wait to sell until they can get a higher price for their property.

 

What to do here in San Diego

 

-          Don’t panic. By all indicators, there is nothing that suggests that a coming recession will be anywhere near as devastating here in San Diego county as the last. That being said, I predict there will be a price softening which will impact our market.

-          If you’re planning on selling, this is a good time. We are seeing some softening of prices, especially in the higher ranges above $800,000 and a slightly longer time on market, but overall homes are still selling well due to reduced inventory. Perhaps better to sell now then face lower prices a year from now.

-          If you’re planning on buying a primary residence this is still a good time, but keep your eye on prices and interest rates. While we will likely see some prices drop we really don’t know what interest rates might look like a year from now. Also, current sellers might be more motivated, given the uncertainties.

-          If you’re a cash buyer investor, I’d recommend waiting unless you can locate a motivated off-market seller. Prices are likely to fall a bit and you’ll be in a better bargaining position.

 

Please note, this information is strictly my interpretation of expert opinions about the current market. Please do your own homework and consult the appropriate professionals before making any buying or selling decisions.

 

Questions? Ready to buy or sell? Please don’t hesitate to give me a call!

 

Posted by

Your Personal San Diego County Real Estate Consultant

                                                          619-846-9249

www.martikilby.com

http://insidesandiegoshortsales.com

Your Home. Our Mission.

       

 

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Rainmaker
1,559,376
Evelina Tsigelnitskaya
SIB Realty - Sunny Isles Beach, FL
www.SIBRealty.org 305-931-6931

Interesting, thank you for an update, I bookmarked your post and read comments later, and follow your blog. 

Sep 03, 2019 06:25 PM #1
Rainmaker
416,196
Steffy Hristova
HomeSmart Elite Group Tempe AZ Tel: 480-966-9353 - Tempe, AZ
Tempe AZ Realtor - Your Home Close to Your Work!

Hi Marti,

I think since 2012 we've had two dips in the real estate market, here in the Phoenix area, and the recovery was very quick. It remains to be seen what will happen next year.

Sep 03, 2019 06:49 PM #2
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Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Hi Marti- it will be interesting to see what happens over the next several months. 

Sep 03, 2019 07:23 PM #3
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Debb Janes EcoBroker and Bernie Stea JD
ViewHomes of Clark County - Nature As Neighbors - Camas, WA
REALTORS® in Clark County, WA

Hi Marti, something has to give. The prices can't keep escalating. We need a correction, and perhaps it will happen with a recession. But, I am hopeful it will be easier to weather than the last one. 

Sep 04, 2019 02:41 PM #4
Rainmaker
300,586
Marti Steele Kilby, CRS
Steele Group Realty - La Mesa, CA
Broker/Owner, San Diego, CA

Amen!  I really don't want to resurrect my short sale skills!

Sep 05, 2019 07:52 AM #5
Rainmaker
482,382
Ricki Eichler McCallum
CastNet Realty - Corpus Christi, TX
Broker,GRI,ABR, e-Pro, TAHS

I personally do not think we are headed for a recession unless it is a man made one on purpose.  However,  different locations experience different ups and downs.  Sales are still high here.

Sep 08, 2019 05:24 PM #6
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Hi Marti! Love your post and do wish you would enter it in this month's challenge (click the contests link below and then the first post should take you there).

Thankfully we didn't really have a 'bubble' in Charlotte in '08 but, we did experience a slump in the overall economy...especially being the 2nd largest financial city in the US, behind only NY - and you know what was going on there! As the economists are predicting, I believe a correction is in-process now and we'll feel the full effects of that but, nothing like the dot-com or The Great Recession.

At least I hope not - like you, I don't want to have to hone my short sale skills again!

Sep 10, 2019 07:24 PM #7
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Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
Charlotte Homes for Sale - Charlotte Neighborhoods

Thanks for entering Marti! Hope you have a wonderful week ahead!

Sep 16, 2019 08:33 PM #8
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Rainmaker
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Marti Steele Kilby, CRS

Broker/Owner, San Diego, CA
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