The recent past has seen a tremendous growth in the real estate market in San Diego. With the state recovering from the 2007/8 economic depression and the economic growth rising steadily, the home prices have risen with a margin of 5%. 2017, however, seems to take a different turn as the real estate industry is anticipated to witness a slow yet steady growth. The post-election uncertainties and the projected composition of home buyers are among the underlying factors attributed to this slower growth.
Sources familiar with the San Diego Market, like Than Merrill of Fortunebuilders foresee a lower increase in the house prices of up to 1.7% in the year 2017 in San Diego. This trend is seen to be caused by the slower population growth, and the disturbing trend that has prompted increase in home prices in the past two years.
Changing Demographic Composition
The demographic composition of San Diego has quite changed, consequently resulting to slow population growth. San Diego is estimated to be devoid of the robust youthful population that is usually essential for many housing markets. The comparatively unaffordable home prices in this region have made it difficult for young individuals to acquire homes.
The home prices and employment rates have been the main enticing factors that the youths consider when moving to any city. Though the job market thrives in San Diego, the housing factor drives away these youths.
Increase in Demand for Lower-Priced Houses
San Diego enjoys a variety of state-of-art recreational facilities and modern social amenities. These facilities have invited a lot of individual settlements in the city, causing an increase in house prices. Many people in turn opt for lower priced houses that they can afford. From such projections it would he healthy for a potential investor to consider developing low priced homes. Such kind of investments are the surest way of tapping into the real estate market in San Diego because they attract first-time buyers.
Rise in Mortgage Rates
With the fall in home prices anticipated, it is right to project that more new home buyers are bound to enter the market. This is expected to come with a heavy blow as mortgage rates are expected to subsequently rise. Several Mortgage experts like the Mortgage Bankers Association predict a rise in the average rate of the home loan by about 0.5% in 2017.
With all these projections in play, consider purchasing a home earlier in the year if you intend to invest in the industry. Prices are expected to increase further in the course of the year, and buyers might be forced to pay more as the year progresses.