Continued low interest rates plays well for San Diego real estate market
August 10th, 2009 Categories: Real Estate News, San Diego County Community News, San Diego county Real Estate News, What to do in San Diego
SAN DIEGO- There is speculation that the FED will not be raising interest rates at their meeting this week but will in fact keep them at current levels. I fell strongly that this is a very important ingredient to the recipe that is keeping our real estate market afloat. On July 16th, I wrote about the importance of current interest rate levels to the San Diego real estate market and to San Diego first time buyers.
My take on the market at this point is the market will remain flat from this point. In order to maintain this stability, knowing there is a boat load of distressed properties not yet on the market, will be the continuation of these historically low interest rates as well as incentives such as the tax credit. There is a continuing strong appetite for San Diego properties at these price points and it is high demand that is propping up our market.
If we lose the incentives for buyers that currently exist in our market we could easily see a pricing decline approaching or surpassing that $280,000 median price we saw in January.
The next ingredient being the tax incentives, while nice, is probably the least important of the two. Being able to lock into a 30 year fix mortgage of 5.5% will have long term benefits on homeownership. Additionally, as time passes the ability to convert this purchase into an income property becomes great and that is how wealth is built in real estate.
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