“Location, location, location!” The old real estate saying rings true when it comes to buying a house in San Diego. The city of SD is known for its beautiful beaches in La Jolla and the vibrant culture of the Gaslamp Quarter. Locals and tourists get drawn to this area year-round because of the weather – it’s a dream for any hopeful home buyer. Unfortunately, the secret is out about how great it is to live here. Trying to buy a home in San Diego is harder than finding parking in the Gaslamp Quarter on a Friday night. However, there is hope!
Here are three frustrating reasons why buying a house in San Diego is like hunting for a four-leaf clover and actionable steps you can take to become a homeowner here.
1. Soaring Housing Prices
Let’s cut to the chase. The first culprit of our story? Sky-high prices. San Diego has always been a desirable place to live. The demand for living in SD has driven up home prices by a ton. The median home price in San Diego County is $850,395, an increase of almost 15% from the previous year.
The rapid increase in house prices has made it difficult for the average buyer to enter the market. Unless you’re a professional company that purchases houses daily, breaking into the real estate market here takes effort. Suddenly, that dream of owning a home in San Diego feels very financially challenging. Maybe not impossible, but pretty darn hard.
2. Intense Real Estate Competition
If insanely high home values weren’t enough of a challenge, let’s throw some competition into the mix. Imagine the frenzy of Black Friday shopping, but instead of flat-screen TVs or the latest iPhone, we’re talking about houses. Buying a home in San Diego is more like joining a battlefield, with numerous potential buyers vying for the same property.
San Diego homes typically received multiple offers, with some selling for around 3% above the list price and going pending in around nine days. It’s like a game of musical chairs, and when the music stops, not everyone will have a seat. Relocating to San Diego and buying property is not easy!
3. Low Housing Inventory
The final character in our trifecta of challenges is a scarcity of available homes, or what we call ‘low inventory’. Just as you thought things couldn’t get worse, they do. In the simplest terms, there aren’t enough homes in San Diego to meet the demand, which just exacerbates the previous two issues.
As of May 2023, there was a 40% decrease in the number of homes listed for sale compared to last year. With fewer homes on the market, the intensity of competition amplifies and prices surge even higher.
Is it a Good time to Buy a House in San Diego
Right now, is it a good time to buy a house in San Diego? It’s a hard question to answer. The current real estate landscape is undoubtedly competitive. The high home prices and low inventory can be daunting. Here are several tips on how to prepare to purchase a home in San Diego during a competitive market:
- Be financially prepared
- Get pre-approved by a lender
- Have a long-term plan
- Be patient
- Prepare to negotiate and counteroffer
Remember, real estate is an investment. Historically, homes tend to appreciate over time. Your San Diego dream home could be a valuable asset down the line. It’s almost always a good time to buy a home here. People love California. The demand for housing in San Diego won’t slow anytime soon.
Buying a house as a Millennial in California is Hard
As a millennial trying to buy a house in California, the struggle can feel as steep as hiking up Mount Whitney. While you’re battling student loan debt and navigating a rapidly evolving job market, you also face the challenge of diving into an extremely expensive real estate market. Remember those San Diego prices we talked about? Many Southern California residents prefer to rent vs buy because of the high prices.
Sky-high home prices, combined with a scarcity of available properties, put homeownership well out of reach for many millennials. There is a generational divide in wealth accumulation because of this! Toss in the reality of low wage growth relative to housing costs, and you’ve got a housing affordability crisis on your hands.
For the avocado toast-loving, digital nomad millennial, cracking the California housing market code can feel like trying to solve a Rubik’s cube while blindfolded. However, with persistence, financial planning, and a little creativity, there may still be a way to achieve the California home-owning dream.
Many millennial homebuyers are getting creative, using strategies like house hacking to purchase their first California home. If you don’t mind having roommates, house hacking can help you offset a portion of your mortgage with rental income. Every penny counts when trying to buy a home as a millennial in CA.
Buying a Home in San Diego is Difficult
Home prices, intense competition, and low inventory make buying a house in San Diego as challenging as catching a wave on your first surf lesson. Thankfully, it’s not all bad. Although it’s tougher, the right homebuying strategy can get you into your dream home in San Diego. If a house is out of reach, start ofo purchasing a condo instead. Getting your foot into the door of San Diego homeownership is the hardest part.