Families vs. Investors
The struggle between families in the real estate market against investors is not new. An April 2024 study suggested that investors are purchasing as much as 30% of available single-family homes nationwide.
In San Diego alone, the cost of a home can also be a barrier for those trying to get into the housing market. In the August 2024 home sales report by the Greater San Diego Association of Realtors, the median sales price of a townhome or condo jumped to $675,000, while the median price of a single detached home came out to $1.06 million.
It’s not just homeowners looking at median-priced homes that are being affected by investors moving in on listings. A previous study showed that around 25% of affordable homes were purchased by investors.
Just like families trying to purchase a home, investors are attracted to lower-priced homes to save money in expensive markets combined with high interest rates. One advantage investors have over home hunters is with more capital to work with, they can go after lower-priced or foreclosed homes which may need revitalization or repair — forcing families to shop at the median price or higher.
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While it may sound like investing in the real estate market is unreachable for families, there is an upside for those who do decide to purchase a home. Even with high interest rates, home sales are increasing with property values climbing.
Data from the Greater San Diego Association of Realtors shows that in one year alone, the median detached home sales price increased by 3.5%. Moreover, Summer 2024 had the highest number of home sales over the past 12 months, showcasing a healthy real estate market for the region.
“The reason investors are buying a lot of homes in San Diego is because they study markets all over the country and they perceive San Diego to be a really … really good investment,” real estate broker Matt Battiata told CBS 8. “It's bad news if you're a first-time buyer trying to buy a home and you're getting beat out by investors but at the same time it is good news because it means that they believe that our market has a lot of promise over the long term,”
For those getting into the market, buying a home is not an impossible task. Experts from the San Diego County Credit Union recommend starting a home search with understanding how much you can afford, working with a local real estate agent who can help find hidden gems (like unlisted homes for sale) at the right price and be prepared to put in a serious offer with a mortgage pre-approval letter.
With that in mind, if you’re set on making your home in San Diego, you must first review your finances: income, debts, savings, financial habits and credit score.
Then explore all of your home loan options. If you’re planning to live in your home for a short period — 5, 7 or 10 years — an Adjustable Rate Mortgage may be a good fit. If you plan to stay there for a longer period, then a Fixed Rate Mortgage Loan should do the trick.
With the right strategy, San Diego can become your home.
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