Is It Still Wise to Make Low Ball Offers in San Diego?

Is submitting a low offer like gambling?

Now I know what people are going to say. It’s still a buyer’s market. This is true if your definition of a buyer’s market is affordable prices and low interest rates but as far as home prices are concerned probably not. I recently read an article stating that San Diego recorded it’s 13th straight month of price increases.

This doesn’t mean that we’re out of this current real estate correction by far but it’s an indicator that things aren’t as bad as people think. I’m sure prices aren’t going to take off at a feverish pace as we saw in 2004 through 2006 but they’re rising ever so slightly. For sellers, as well as all the rest of us homeowners, this is great news because this means that perhaps the worst has passed here in San Diego.

I can share with you from experience that I’ve worked with buyers who have submitted low offers on properties only to lose out on getting that home they really liked. There will always be deals to be made it’s just that they’re a different type of deal. Compared to the inflated prices of recent years a person can save hundreds of thousands of dollars on a property here in beautiful San Diego.

I’m sure that we’ll see more foreclosures happening but I can tell you that banks have learned from their past experiences on how to deal with large inventories of foreclosed properties. They’ve learned that by flooding it  with vast amount of foreclosures they’re only hurting themselves by affecting the laws of supply and demand. This so called “Shadow Inventory” that’s supposed to flood the market for about a year and half has failed to materialize. I believe that any future foreclosed properties will be placed onto the marketplace in a more staggered pace rather than in a massive influx of inventory.

Bottom line is that anyone thinking of buying property in San Diego has a great opportunity right now. Can home prices fall further? Of course they can. There are are no guarantees in real estate but one. The prices of homes in the long term will always increase. A home is a long term investment not a short term one. Someone once told me that the purpose of buying a home is to assure that you have somewhere to live in your latter years of life. After all how many of us plan on paying rent when we’re 65, 70, 75, 80 or older. Not to mention what will the rents be like in 2050?

With the current life expectancy getting higher and higher we all have to plan further and earlier than our parents and grandparents. We all strive to achieve the American Dream, but the number people that can achieve it is getting smaller and smaller. My advice, plan ahead and don’t gamble with your biggest assets which to me would be your health and your home.