Stay In or ‘Get Out’ of San Diego Real Estate

If interest rates stay under 4%, then stay in the San Diego real estate market.

If those interest rates creep up over 4%, then you should sell, and ‘get out’ of the market.

How is that for a simple game plan for 2018?

Look at the below graph. We could easily see another stellar year for San Diego Real Estate with property values increasing as much as another 20% in value.

Yes, you read that correct, in 2018 property values in San Diego will go up another 20%, bet on it, just as long as interest rates do not go over 4%.

So what do I think indicates a real estate market peak? (which will definitely come in the next 1-2 years). These 5 things will indicate when the peak is.

1. Strong upward momentum in existing homes sales

2. Inventory of homes for sale to be below three months

3. Foreclosure sales to be near their lows for the cycle

4. Strong new home construction

5. Housing affordability to be at or near 17%

Do not wait to sell for too long, and here is why:

San Diego real estate has become very highly valued in 2017 – but many people still believe it’s still a good time to buy, which may turn out to be correct, and I would support if you are not considering your home to be an investment (a whole topic in itself), but see it as a nice tax benefit and a place that nobody is every going to raise your rent or tell you to move.

History shows that there is a negative expectation to buying any asset that is valued so high- which in plain English means that if you sell your property, then investment returns are likely to be very low (or negative) for the next 8-11 years.

 

***PS***I thank you again for all your past and present business. When you want help with anything real estate related, call me at 858-225-7385 or email me at Brad@BradBrinkman.com. You can count on us to give you clarity on how to achieve your real estate goals!