Agents says buy now .. friends say wait .. who is right? (San Diego: sales, real estate market)

[indecisive]

It's official - I'm reloacting to the SD area at the end of the year. Qustion is, should I jump into the real estate market now or not? My agent says its a great time to buy as there are deals to be had, my co-workers say wait for another year and rent in the mean time. If I buy now my employer pays all closing costs and provides an extra one time 10K towards cost of living. My budget is not that high - just 450k, so will waiting warrant the 15k I will lose from employer benefits as well as the loss of tax benefits (another 8k or so)?

[NYSD1995]

Originally Posted by indecisive

It's official - I'm reloacting to the SD area at the end of the year. Qustion is, should I jump into the real estate market now or not? My agent says its a great time to buy as there are deals to be had, my co-workers say wait for another year and rent in the mean time. If I buy now my employer pays all closing costs and provides an extra one time 10K towards cost of living. My budget is not that high - just 450k, so will waiting warrant the 15k I will lose from employer benefits as well as the loss of tax benefits (another 8k or so)?

Interesting situation. Normally I would recommend renting when moving to a new city, because you can't be sure where you'll want to be without spending some time looking around. What if you hate living here?

If you are talking about the 15k from your employer + the 8k in tax + the cost of rent for a year (say 20k), you are talking about some substantial money. The closing costs often can be worked out to have the seller to pay them or get them financed so you don't have to have the cash on hand for them, but the 10k is pretty substantial to walk away from on speculation about a home price nosedive.

I think if you can come out here ahead of time, check out neighborhoods, and really do your research, it will probably be OK to buy now vs. a year from now. It all depends on the location and the property. You might get a better deal in a year, but I don't think it's going to be the drastic difference some people are talking about. Realistically if prices are going to seriously decline you might have to wait three, four, even five years before the bottom hits at the rate they are going down now. Personally I think if you are looking at single-family homes in established areas you will not see the big price drops that you see in the new homes and condos.

Agents will always tell you to buy now, that is how they get paid.

[kettlepot]

I too would normally have suggested you wait. However, a lot of the big declines have already happened in San Diego (15% so far). Prices definitely won't be going up any time soon, but given that you would be passing on a lot of employer provided benefits, it might be worth your while to choose to buy now. Another plus for you is that there are a few desperate sellers out there now. Not every property is a deal, but some definitely are. The August/September mortgage liquidity crisis put a few more sellers into panic mode.

I know of one property that is going for a nice 5% discount simply out of desperation.

[indecisive]

Great input - Thanks!. My company is paying for a 3 day home hunting trip that I'll be taking in a few days. Hope to look at a few homes - though havent seen many SF homes online in my price range. Looks like most likely I'll end up in a townhome in San Elijo hills, Carlsbad or Rancho Bernardo area - cant afford anything in La Jolla where I'll be working. The difficulty is in finding a nice home in a nice area close to good schools with at least a decent size grassy back yard.

My agent says that rental property will be in high demand and sellers may now be more flexible due to the fires - though I hate to profit from the loss of others.

[wanttoteach]

I am in the same position. We are trying to buy. However, I am also afraid that things will drop much lower. This is my feeling though: If I can get a good deal then I will be okay when and if prices drop lower. I will only buy a home that is a REALLY good deal.
The places you are looking are really great. Do as much research as you can before you arrive. It will be very difficult to find a place in 3 days. We have been looking for about 3 months. Try to be very specific in what you are looking for and find a good realtor who will not waste your time taking you to homes that you aren't interested in. I would have a list of homes that you want to see ready for your realtor. Good luck! You will absolutely love it here!

[sailorgirl2007]

We bought six years ago when homes were "reasonably" priced. The question is, how long are you planning on staying? Everyone knows the market goes up and down, however you can't go wrong with CA real estate. We're trying to sell and have had to lower our sale price significantly, BUT we've gained enough equity to be able to do so. If you're not looking to flip the house, but looking for a home, it's worth the investment. Nobody really knows which way the market is going to go, but if you keep your home for a while, you WILL eventually gain. Another point is that you will be able to get a tax benefit out of it.

[nene39]

I am a Florida realtor for 14 years, used to be a financial analyst in NY. I'd say buy now, it's the best time to buy wherever you're relocating, unless you're relocating to Manhattan. It's a buyer's market almost everywhere else. As to somebody making a comment that a realtor tells you to buy just so they can make a sale, not all realtors are the same, same as in other professions, there are good ones and bad ones. I am a buyer's agent, made 6 figures for several years here in Florida before the subprime mortgage problems arose, only thru client referrals, God bless them! Business to me does not stop with just one deal, it's a livelihood, so I make sure that I do my best and takes care of clients, so they can take care of me. I have been known to stop a client from buying something they think is good, simply because I know they can have better deals. $50K to you is just $1500 (3%) to me in commission. I'd rather save you that $50K, you appreciate my taking care of your interest, and you give me 2 referral deals in 1-2 years that's worth $12K on an average sales of $200K each. Referrals available, if you don't believe....write the webmaster for my email address.
Sorry about this guys, just that I work too hard to just leave this alone.

[Huckleberry3911948]

Originally Posted by indecisive

It's official - I'm reloacting to the SD area at the end of the year. Qustion is, should I jump into the real estate market now or not? My agent says its a great time to buy as there are deals to be had, my co-workers say wait for another year and rent in the mean time. If I buy now my employer pays all closing costs and provides an extra one time 10K towards cost of living. My budget is not that high - just 450k, so will waiting warrant the 15k I will lose from employer benefits as well as the loss of tax benefits (another 8k or so)?

give it 6 months.
stephen s
san diego ca

[EscapeCalifornia]

Realtors will always tell you to buy now. How else do they get paid? Go to a car dealership and ask if you should buy now or wait to see what next year's model will be like. Let me know what they suggest.

When house prices are rising, they'll say you better get in before you get priced out of the market forever. When house prices are falling, they'll say its a great time to get a bargain.

[niy38]

Definitely wait!

for your price range, u only can get a townhome/condo in San Elijo hills,
Carlsbad or Rancho Bernardo area.

by the way, San Elijo hills might have a good primary school, but not
high school.