San Diego real estate market forecast 2015
Where does the San Diego real estate market seem to be headed for 2015? Once again at this time of year, when all the pundits come out with their forecast, it’s the rare individual that does not go along with the real estate industry’s proverbial ‘now’s the time to buy’ mantra. I’m going to be part of the 1% who deviates from the traditional ‘by now before you’re priced out of the market’ end of the year talking points.
When it comes to real estate marketing forecast, I don’t believe the general public should put much credence in the opinions of local real estate brokers, agents, or economists associated with the real estate industry. This is because when you get down to it the real estate industry is in the sales business. And in sales you must be optimistic and sometimes overly optimistic about future trends if you want to survive.
Now, just think about it. When’s the last time you heard of, or read, an opinion from a local real estate professional that perhaps the future outlook for the market was stagnation, or in the case of the San Diego real estate market bubble bursting in 2005, that we were near or at the top of the market?
Personally, I’ve never understood why the National Association of Realtors has its’ own economist. There has to be a tremendous pressure to shade all forecasts in a positive light.
Having been in residential real estate for over three decades, I consider myself a realist. I endeavor to always call my forecast for the new year in San Diego real estate as I personally see it, without regard for the ever present ‘Now’s a great time to buy real estate’ mindset of the industry majority.
Well, with all that said, you’re probably wondering what am I going to get down to the meat of my forecast for the San Diego real estate market for 2015. In one sentence, the San Diego real estate market for 2015 will be much like the San Diego real estate market was in 2014. In 2015 my San Diego real estate forecast is for modest single-digit appreciation.
On January 5, 2014, I published my San Diego real estate outlook. This is a quote from my 2014 outlook: “When I consider all the factors affecting San Diego and California real estate in 2014, I believe we will see continuing modest improvement that will most likely end up being single digit San Diego housing appreciation for the entire year. Sorry, but the double digit San Diego home appreciation experienced in 2013 looks to just be a found memory in 2014â€.
One major real estate industry tracking service showed that through the end of November 2014, the San Diego real estate market saw a modest 2.6% home price increase over 2013. Yes, for 2014 the San Diego real estate market fell well short of the majority, consensus expectations.
San Diego real estate market has had a nice rebound over the past few years, the majority of which was concentrated in the lower end properties that investors were purchasing. The majority of these investor purchases were motivated by the quick flip potential these low-end properties provided. Naturally, when the low-end foreclosure, and real estate bank owned properties were snapped up, most in investors exited the market. Today, the majority of the San Diego residential real estate sales are once again being purchased as a principal residence.
After our huge drop of approximately 30% from the top of the San Diego real estate market in the summer of 2005, the San Diego real estate market saw a nice home appreciation rebound that started in 2012, and has since risen approximately 25%.
The best home price appreciation in San Diego occurred in the beach communities, some of which have now returned to their real estate-pre-bust prices. Most San Diego properties still remain under their peak values seen in the summer of 2005. Now, although this is good news for the majority of San Diego homeowners if they purchased their property around 2005, they have made about nine years of mortgage payments, and if lucky, their equity position is now the same as it was at the time of their initial purchase.
San Diego is an expensive housing market, and when we have even modest multi-year housing appreciation, it creates and affordability problems. Many industry insiders believe our tepid San Diego economic recovery has and will keep potential San Diego home appreciation very modest in 2015.
San Diego real estate market
Below is a hyperlink list of my new year’s predictions for the San Diego real estate market going back to 2005. Next, each prediction is a short summary, if you wish to read the full post, just click on the hyperlink.
2005 – – San Diego Real Estate — A Trend to Go National? (The big divergence between home sales and home prices seen here in San Diego indicated a dropping market and a real estate trend I thought would go national.)
2006 – San Diego Home Sales Figures: Not All That They Seem on the (industry and news reports indicated that San Diego home value drops were substantially less than what was occurring in the real marketplace. This was mainly caused by failure to consider all the concessions that developers as well as private sellers were offering to entice buyers to purchase San Diego homes.)
2007 — Is Your San Diego Home Appraisal Really Accurate? (This focused on the fact that many appraisers were overvaluing San Diego homes because they were not fully considering seller concessions that were taking place in the open market.)
2008 — San Diego Real Estate Market: What Did You Expect?  (How the main-stream media still did not raise any real estate red flags in late 2005. Instead it was ‘just a return to normal’ or “a great time to buy without the pressure of multiple offers.â€)
2009 — California: Land of Sunshine and a Year of FREE Living (How many California underwater homeowners were living mortgage and tax payment free for a year or more before foreclosure)
2010 — San Diego Real Estate 2010 Forecast: The Year of the Strategic Mortgage Default (For 2010, San Diego housing will remain a risky deal that will again be dominated by government intervention. Until both the Federal and State governments get out of the housing market, a real bottom will not occur, thus San Diego housing values will continue to decline well into the next year.)
2011 — San Diego Real Estate 2011 – Year of the Short Sale: I personally do not see any real base building in the San Diego real estate market until 2012
2012 – San Diego Real Estate 2012: The second half of 2012 could see some solid base building, with perhaps, some modest single-digit appreciation by year’s end
2012 – San Diego Real Estate Market 2013: I believe we will see continuing modest improvement that will most likely end up being single digit San Diego housing appreciation for the entire year.
Bob,
I spent over 15 years as a REALTOR® Assoc. Exec. in the desert doing the analysis of desert real estate. I offer the following not as a critique but more as observations:
1. Your market forecasts appear reasonable…not sure why you think you need several paragraphs badmouthing everyone else — why do you think only you are impartial while all others are biased? If you are good at forecasting who cares if others are good or not.
2. It is always the “time to buy” — just not for the same subset of buyers. It would be more interesting if you looked at the market and suggested which buyer set the market favors.
3. I only looked at last year — it appears most of the facts and circumstances provided were state and national stats with a forecast title “San Diego” …that works only as long as San Diego mirrors state and national activity. I think a San Diego forecast would be more powerful if supported by San Diego stats and observations.
Anyway — just my 2 cents