The Anderson Forecast at UCLA reports that the median San Diego home price is expected to rise 50% by 2013! The forecast has projected that we have hit the bottom, and prices will begin to rise later this year. It is interesting to think about what this means for Coronado home buyers.
For example, will Coronado homes rise along with the average, or will the impact be greater than or less than a 50% rise? The Coronado real estate market is different than the average San Diego market. Prices have not fallen as dramatically in Coronado as they have fallen in other parts of Coronado, which might lead home buyers to reasonably assume that prices will not rise as dramatically either. In other words, Coronado is a less volatile real estate market. It seems likely that Coronado homes will only rise 25% by 2013 and other such areas that have been hurt the most recently will rise 75%, making for an average of 50%. Of course, Coronado homes are expensive, so a 25% rise on a $1,500,000 home (which is roughly the average in Coronado) will mean the buyer will earn $375,000 in appreciation! That number is not adjusted for inflation, but still– huge opportunity.
It will also be interesting to see if this report makes some sellers less flexible. Many Coronado sellers have cash and therefore holding power. With signs pointing toward high prices returning in a few years, many Coronado home owners may elect to hold rather than give buyers the discounts they insist they receive to get a deal done.
And of course naysayers will argue, “hey, the Anderson forecast are just a bunch of researchers who could just as easily be wrong.” True. But then, they predicted the fall before it happened, which gives credibility. And it does seem logical. Liquidity has returned to the market, fear has more or less departed, and the oversupply of listings is starting to drop rather than increase. If I were a buyer in San Diego, I’d start looking quite seriously right now.