Have We Hit Bottom Yet?

By Mark Archer, San Diego, CA Investor/REALTOR®
Blog: www.sandoghomes.com

There is lots of news lately about the dismal local real estate market is slowly recovering.

Frankly, I don’t see the recovery and as the saying goes, “The proof is in the pudding.”

Back in 2005 I listened to a very smart real estate investor named Bruce Norris tell a crowded room of real estate investors that the Southern California market was about to tank.  He backed his claim up with hard data and within two short years, he expertly predicted the biggest real estate crash in Southern California history.  Bruce is still teaching today and still predicts that there is much work to do before the real estate market starts recovering.

One of the biggest challenges we have in our local San Diego market is inventory. Before the foreclosure meltdown, banks would typically follow the conventional non-judicial foreclosure process. (Approximately a 120 day process in California)

Now, it seems that banks are taking much longer (18 months -30 months) to initiate and complete the foreclosure process, leading to an ever-increasing supply of houses that are neither listed for sale, or available for buyers.   Some call this Shadow Inventory – bank inventory that is not publically accessible by the marketplace.

Many experts believe this is one of the reasons why there is so much confusion in the marketplace and a reason for the slow real estate recovery.

Buy and hold, Rent or Wait It Out?

One of the most common questions I get is should I buy, rent or wait on the sidelines. While there is really no clear answer as everyone’s personal situation is different, you really need to weigh the pros and cons of each situation.

Clearly, there is lots of real estate that is priced right for both the investor and prospective homeowner.  While I predict a flat market, there is also really no way of telling if the market will flatten, slowly recover or continue to decline.

Not all San Diego submarkets are equal. In fact, what happens in LaJolla may be directly inverse of what happens in Eastlake, Chula Vista. So, it depends on your market, and desires.

It depends on your needs, desires and for investors: cash flow. Cash flow in San Diego continues to be tight but we have seen improvements in rents and vacancies in both the single family and multi-family sectors.

With interest rates at all-time lows, it is a good time to buy real estate, but again, isn’t it always a good time to buy real estate when priced right?

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Posted by Eastlaketimes on May 30 2011. Filed under Business News in Chula Vista, Community of Eastlake, Eastlake News, Real Estate. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry