subject: How The Rate Of California Foreclosures Ultimately Impact San Diego's Real Estate Market [print this page] San Diego and how California foreclosures affect its real estate market presents an interesting case study for the movement of foreclosures and real estate issues. San Diego is sometimes known as "America's Finest City" and at present it seems to be facing a number of budget and structural issues that are only worsened by foreclosure rates in San Diego, San Diego County and the state at large.
For pretty much all of 2009, the average sale price of a home in San Diego fell noticeably. And even though $300,000 might seem like a lot for a home, especially for those from distressed cities in the Midwest, that price is a very significant decrease in the price of a home in San Diego and San Diego County from pre-2009 levels.
For those looking for good news, there actually has been a little bit of it, which has helped to at least lift temporarily the cloud of gloom that has descended on San Diego and the Golden State lately. For September through November, 2009 there actually was a price increase on the average sale price of a home in San Diego of as much as 1.6%, or $5000. It's at least a start, most people would say.
San Diego property values, however, over the last five years have dropped by about 35%. For anybody who bought in to the market during that time frame down in San Diego, and who was expecting to make money from its sale eventually, is now looking at a home that they probably owe much more on then it's now worth, sadly.
Another reason or factor that seems to be exacerbating the rate of CA foreclosures is that many more people than used to be the case are now considering foreclosure is a logical first step rather than as a last resort, which is what it used to be thought of as. This has affected San Diego just as much as it has many other cities in California and around the nation.
To get an idea of how hard foreclosures and the decline in real estate has affected municipalities, consider that the average list price of a home in San Diego was nearly $496,000. Consider, as well, that the average sale price was a little bit more than $300,000 and one quickly gets an idea of how seriously underwater (owing more than a home is worth) many people may be out in San Diego when it comes to their property.
For those who assume that one can always engage in a short sale, which is selling the home -- after the lender has agreed to do so -- for less than it is owed (with the lender usually writing off the difference), they should know that the state has been going after the difference for taxes. Looking at a significant tax bill in the event of a short sale could actually be forcing even more people into foreclosure.
San Diego is a beautiful city with a variety of diverse and extremely attractive properties in its housing inventory. Investors looking at the decline in prices and who are willing to sit on a property they buy for several years might actually make something of the market, despite the current rate of CA foreclosures in the state and, especially in San Diego, so keep that in mind when thinking of investing.
