To the resilient community we love, a letter from Neda Nourani:
As I look back over this year, I see the people and families we worked with, the new challenges we faced, and the new solutions we discovered. Adjusting to the pandemic led our buyers and sellers to a common conclusion: We can live where we want, where our families and loved ones live, where, as the song goes, the climate suits our clothes.
From January to May, the real estate market moved at a frenzied pace, prices skyrocketed, and people reacted emotionally. Buyers agonized over losing house after house, and sellers were awestruck by unprecedented offers. We consulted and consoled, we worked harder, and we found new ways to serve our clients in the changing market.
Many of our sellers wanted to move out of state. Some wanted to be nearer to family, and others sought states where schools had remained open. We helped these sellers secure unimaginable prices and terms for their homes, and sift through an overwhelming number of unusually high, often unorthodox offers.
Sellers who wanted to sell and rent before their new purchase faced obstacles with inventory. Covid restrictions put short term and private vacation rentals at a premium. Many landlords opted out of the long term rental market to capitalize on short term rental demand, and investors bought up vacation homes to run as VRBOs.
Buyers, too, faced enormous challenges this year. In my 18 years of working in this business, I have never seen so many cash buyers. This made it challenging for the financed buyers looking to take advantage of the low interest rates, so we turned to our trusted lenders to help make their offers more competitive. Additionally, we reached out to potential sellers with hand-written notes, to our past clients, and to our real estate associates to secure 12 off-market properties for our buyers.
The biggest challenge I saw for buyers this year was the growing pressure to forgo important contingencies that protect them. I have a lot to say on this subject, but let me start here: a buyer should always have the time and opportunity to do their due diligence. There are exceptions here, but there is no exception for choosing an experienced agent who will help you navigate these types of decisions. We take our duty to protect our clients seriously, even if it means encouraging them to walk away from a property for reasons they may have overlooked in moments of desperation.
We are blessed to work with such wonderful clients and colleagues, and always aim to show our gratitude by giving back to our beautiful community. We have been lucky enough to do so through our partnership with Mama’s Kitchen, volunteer work with the Community Resource Center, donations to local groups, and referrals to small businesses and independent contractors to support the local economy. We are forever grateful to this community - for their trust, their strength, and their support - and we look forward to a bright new year in 2022.
SPRING IS COMING -- If you are looking to buy or sell a home in 2022, here is some information you will want to take into account regarding the San Diego real estate market:
- What we can expect
Another very competitive season with lots of highly qualified buyers, and not enough inventory.
- Who will control the market
It's still a seller's market, so they will continue to dictate the terms. Properties with nice upgrades and prime locations will give sellers the power to ask for terms like free rent-back, shorter contingency timelines, or sell the property as-is.
- Who will be buying
First time buyers, upsizers, downsizers, and private investors purchasing secondary homes. Millennials, long overdue to buy, have entered the market by storm.
- Who will not be buying
Flippers are almost certainly priced out of the North County Coastal market, and unfortunately contingent offers have a very low acceptance rate in a seller’s market.
- How buyers will compete
Interest rates are still very low, so budgets and purchase prices continue to rise. Cash buyers are plentiful, and “bank of mom & dad” is a term being used more frequently. Parents with cash who are willing and able to help are either cushioning down payments, or are acting as the bank to loan their kids the entire amount, allowing them to compete as cash buyers. Short timelines are key for any buyer, and the strongest offers have the fewest strings attached.
- What will inventory look like
The main question we hear is “If we sell, where will we go?” Homeowners who are contingent will have a harder time competing against non-contingent buyers. An experienced agent can help sellers negotiate rent-back time and secure a home, thus opening the door for more inventory.
- What will change
As the nationwide foreclosure ban was lifted after nearly 18 months, homeowners who had received forbearance were called to resume their mortgage payments. We will inevitably begin to see more foreclosures by the summer, which will open up more inventory to the market. As interest rates start to creep back up, we will also see a small percentage of buyers leave the market.
In order to be competitive in this San Diego real estate market, you need a strong lender, agent, and team to support you. You should not be wandering through this process alone. Find a highly experienced lender who will get you fully approved before submitting an offer. They will help keep your contingencies short and ensure your appraisal will be done in time. You will also need to choose an experienced and knowledgeable real estate agent who knows how to make your offer competitive, who will give you sage advice every step of the way, and help you find properties off market.
We always say homes and buyers choose one another. If a home calls to you while you are searching, run to it! If the door opens, walk in. You're home.
It may still be your market, but it won’t stay this way for much longer. We expect the market to stay in the seller’s favor for a few more months, so winter will be the time to prepare your home for a springtime sale. Now is the time to interview experienced listing agents so they can guide you on how to prepare your home. Don’t leave your home in the market’s hands, make sure you have extraordinary representation when it comes to marketing your home, selecting the most qualified buyers, understanding your options, and negotiating important terms.
The NEDA NOURANI Team serves San Diego's North County Coastal real estate markets, including Encinitas, Leucadia, Olivenhain, La Costa, Carlsbad, Solana Beach, Del Mar, La Jolla, and beyond!