To our wonderful community,
Early this year, we witnessed a surge of energy in the San Diego real estate market, setting the stage for a dynamic year ahead. After a somewhat quiet and worrisome 2022 fourth quarter, buyers began to show renewed interest. Eager to cease waiting for prices to drop, they ventured into the market once more. The months from January to June were marked by a bustling real estate market. As summer months arrived, we experienced the typical seasonal slowdown, with local families taking time off for vacations. By late summer, interest rates emerged as the true culprit affecting our real estate market. Despite low inventory and plenty of eager buyers, the tripling of interest rates reduced buyer purchasing power, making the current prices seem out of reach for many. Frustratingly, rent prices continued their upward climb, leaving prospective buyers feeling like they were throwing their hard-earned money away.
Higher prices and interest rates have made purchasing a home more difficult than ever, and this is especially difficult for the younger generation of buyers entering the market for the first time. In response, a heartwarming trend of family assistance has emerged. Many parents and grandparents have stepped in to help, whether by gifting the entire purchase, providing the down payment, or offering direct “loans” at more favorable rates. Their support has empowered these younger buyers to achieve their dream of homeownership while staying close to family.
The Standstill Between Buyers and Sellers
One of the most prominent challenges right now is the standoff between buyers and sellers. Buyers feel they have finally entered a buyer's market, while sellers maintain the belief that it's still a seller's market due to low inventory. This tug of war results in buyers hesitating to meet asking prices, while sellers are reluctant to lower them.
The Low Inventory Conundrum
Low inventory continues to be a persistent issue. Many homeowners have held onto their properties for decades, some without any mortgage debt or enjoying exceptionally low interest rates. The prospect of substantial capital gains taxes and the challenge of finding smaller, more affordable homes in a high-interest rate environment have deterred them from selling. New construction is so rare that as soon as the “Coming Soon” sign goes up, there is a waitlist starting.
The General Mood
The mood among the public is somber and dispirited, reflecting the broader concerns of our times. Rising property prices, along with increased costs of essentials such as gasoline and food, political uncertainties, school safety concerns, racial discord, and global unrest, have led many to reconsider where they want to live and raise their families. While in the past three years we saw many people move out of the state, we’re now witnessing more of our clients considering destinations outside of the U.S., with European countries like Portugal, Italy, and France gaining popularity.
Navigating Market Shifts
Many experts believe we are experiencing a similar lull as we did in 2022. By spring 2024, we anticipate that buyers will re-enter the market, especially if interest rates drop to more manageable levels, and inventory rises.
The facts remain clear—San Diego remains one of the most sought-after and beautiful destinations in the United States. With its mild weather, stunning beaches, and laid-back lifestyle, it continues to attract people from all over. If you plan to hold onto your home for the next 7-8 years, chances are prices will continue to rise by another 10-20%.
In times of market shifts, the real estate industry undergoes significant changes. Some agents may leave the industry or retire, while others may seek out brokerages that can weather the storm. This period also prompts clients to reevaluate their choice of agents. It's crucial to find professionals who are experienced, empathetic, market-savvy, and well-connected to off-market properties.
As your local real estate professional, I'm here to assist you in navigating these ever-changing tides. Whether you're buying, selling, or simply seeking advice, please don't hesitate to reach out to me directly. Your goals and dreams are my priority, and together, we can seize the opportunities presented by this continuously evolving real estate landscape.
WORKING WITH NEDA NOURANI: EXPERIENCE THE DIFFERENCE
- 20 years of experience in luxury real estate, offering deep market knowledge, negotiation strategies, and unparalleled client service.
- Highly regarded by clients and colleagues, earning a reputation for professionalism, integrity, and exceptional results.
- Consistently sets neighborhood records for highest sales prices, maximizing returns for sellers.
- Tailored, targeted marketing tactics designed to generate interest and drive demand attract qualified buyers.
- Completely hands-on with every client, and works hand-in-hand with her agents to ensure a custom experience for each client and their specific needs.
- International access to luxury buyers across 50+ countries, expanding the pool of qualified purchasers.
- Access to a large network of off-market leads and pocket listings in all price points.
- Part of the largest network of luxury agents in the US, attracting the most qualified buyers and heightened attention to listed properties.
- Dedicated transaction team who ensures smooth and efficient transactions, providing comprehensive support to clients.
NOTE TO SELLERS:
- Prioritize Presentation: Make your home as appealing as possible to today’s buyers by ensuring it's clean, well-staged, and in move-in-ready condition. With interest rates where they are, recognize that today's buyers may not have extra cash for extensive upgrades.
- Stay on Top of Maintenance: Address known issues before listing your home to avoid giving buyers reasons to hesitate or request repairs.
- Set Realistic Prices: Work with your agent to accurately price your property from the start, avoiding the temptation to overprice and test the market. This is not the time to chase the market down.
- Consider Seller Buy Downs: Offering incentives like seller buy downs can attract a broader pool of buyers, especially in a market where budgets are tight.
- Hire Strong Representation: Invest in a reputable and experienced real estate agent who can guide you through the selling process and negotiate on your behalf.
NOTE TO BUYERS:
- Your Agent Matters: Recognize that an experienced real estate agent brings invaluable knowledge, industry relationships, resources, and advice that apps and websites cannot replace.
- Follow our 7/10 Rule: Everyone has their top 10 must-haves. If you can find a home that has 7 out of 10, you’ve won! Understand that there is no perfect home, regardless of the price point. Be prepared to compromise on certain aspects to find a home that meets your essential needs and preferences.
- Beware of "Deals": Be cautious when you come across properties that seem like incredible bargains. Often, there may be underlying shortcomings or hidden issues that could affect your long-term investment.
- Utilize Your Agent's Connections: Expect your agent to actively network and provide you with access to new properties, including pocket listings that may not be widely advertised. Their connections can lead you to hidden gems in the market.
It's Your Real Estate Journey: Selecting Top-Notch Representation in Real Estate
Choose a team who will empower your real estate journey. Here’s how working with #1 team in North County Coastal at Compass gives you a distinct advantage.
- In-house Transaction Team - Working hand-in-hand with Neda, the team ensures that each transaction is handled with care and precision, and that there is absolute transparency for each of our clients.
- In-house Administrative Team - Customer service always comes first for Neda Nourani & Associates. Our support team creates a seamless experience for any client, agent, or industry partner working with us.
- In-house Marketing & Design Agency - Instantly recognizable, our brand stands out from the rest. We do the same for our listing, and ensure they’re seen by the most qualified buyers and reputable agents.
- Private Exclusive - Tap into our network of buyers without publicly going on the market. This is a great solution for sellers who need flexibility or extra discretion. Whether you don’t have time to get your home market-ready, or need extra time to find a replacement property, we can still get your home in front of many qualified buyers.
- National Network - Compass is the #1 brokerage in all of San Diego, and all of the United States. Our in-house network connects you with the top agents and their clients all over the country.
With each new year, we’re faced with new challenges in the real estate market. Our team is constantly evolving to stay ahead of market trends, and to educate our clients so they can make the best and most lucrative decisions for their investments.
Also known as Seller-Paid Mortgage-Rate Buydowns. Sellers have started offering concessions that decrease the buyer's mortgage interest rate, either for the entire loan term or just for the initial years. This can be achieved through two methods: the seller assisting with the buyer's closing costs by using discount points or covering the expenses associated with a temporary rate buydown.
A temporary rate buydown lowers the buyer's mortgage rate for the first few years of the loan. The cost of a temporary buydown is equal to the amount that the buyer would save over the reduced-interest period, which essentially makes it a way for the seller to prepay interest on the buyer's behalf.
A permanent rate buydown is when the seller pays a portion of the buyer's closing costs that are used toward buying mortgage discount points. Each point reduces the rate by about 0.25 percentage point, depending on the lender, and costs 1% of the loan amount.
Also known as a like-kind exchange, it is a tax-deferral strategy that allows individuals or businesses to exchange one investment property for another without triggering immediate capital gains tax.
What is a 1031 Exchange? A 1031 exchange allows you to sell an investment property and reinvest the proceeds into another similar property without paying capital gains tax at the time of the exchange. This typically means that both properties must be used for investment or business purposes, rather than personal use.
Benefits: The primary benefit is the ability to defer taxes and potentially increase your investment portfolio over time. You can continue to roll over gains into new properties, allowing for compound growth.
Compass Concierge - Compass will lend you a portion of the funds to elevate your home before going on the market. The sole objective is to earn you a higher return on your sale. The money borrowed will be paid through escrow when you close.
If you're looking to buy, sell, or invest in 2024, please give Neda a call directly at 760-822-7154. Please know that we're here as a resource and would love to help answer your real estate questions. In addition to advice, we can pull net sheets that show your potential profit if you sell, provide a report of recent sales in your neighborhood, pull a collection of available homes in your budget, or refer you to contractors and designers if you’re going the renovation route. We aren't into high pressure sales; we simply want our community to have the facts and know their options. Have a prosperous new year!