Residential real estate is a kind of property with a single family or multifamily house built on it. Its classification depends on how they are connected to adjoining residences and land. Different types of housing tenancy may be used for the same occupation purpose. A single owner may own connected residences and lease them out. Or connected residences may be owned by separately through an agreement covering the relationship between owners and the common areas and concerns.
The residential real estate in San Diego appears to be in good shape. Prices have increased and the number of foreclosures and homeowners having difficulty to meet mortgage has fallen significantly. However, under the surface, there is danger waiting as prospective buyers are looking for more affordable housing. But if you go around the coast of California, it is almost impossible to find a reasonably priced residential real estate. In San Diego, the value of homes are rapidly rising and a convergence of many factors will continue to drive the market prices even higher.
Factors that Influence the Rising Prices
- Property 13 – It recaps California property tax rates at 1.25%. It also freezes assessed property values at it original purchase price. This measure artificially pressures inventory and makes prices soar because older homeowners are discouraged to sell.
- Low Inventory of available land – In almost all desirable neighborhood in the premises of San Diego, land is scarce. When there is development within the neighborhood, it would mean tearing down an expensive home and reconstructing one that is much more expensive. While this is good for adjoining and surrounding homeowners because the value of their properties go up, it makes it more challenging for prospective buyers.
- Property Ownership means greater investment – When real estate hit the bottom during the financial crisis, investors swamped the middle market and ate up foreclosures and short sales with bargain basement prices. These residential real estates were converted into homes for rent. What meager affordable inventory that existed within the market was squeezed.
- Foreign buyers offering higher prices – It takes several months to go through a process of buying a home. However, rich foreign buyers who desire to live in the United States, buying residential real estates is just like buying an appliance. They have ready cash and most often they would go above the market prices to secure the sale. Foreign buyers have caused the prices of residential real estates to soar high.
- Coming Soon!