What is it like being a buyer or seller in this market?
If you’ve been following some of our recent market updates, you have likely heard that Downtown San Diego is extremely low on inventory. This has been a common theme for San Diego county, but Downtown’s market was not as competitive until recently. So what does that mean for buyers and sellers? To understand each prospective, we will need to look at one at a time. In this blog, we are going to go over what it is like being a buyer in this market.
As previously mentioned, Downtown San Diego’s market is really low on inventory. Properties are selling extremely fast, even in the higher price points. As I write this, there are only 46 active listings in Downtown which are made up of everything from a $299,000 studio to a $11,950,000 penthouse. There are currently 81 properties under contract in Downtown and 64 properties have sold in the last 30 days. So what does that mean as a buyer?
Downtown San Diego’s Market As A Buyer
With inventory being as tight as it is, it can be a bit frustrating as a buyer. While there are 46 properties in all of downtown, there likely are only a couple of options to choose from that actually meet your criteria. As new listings hit the market, they are typically moving extremely fast and now we are often seeing multiple offers. So how do you set yourself apart?
It is extremely important to work with someone who really knows and understands downtown. In your mind, you likely have a list of “must haves”, but how do you find property that fits that list with so little to choose from? By working with someone who knows the Downtown market extremely well, they will be able to pinpoint certain buildings and floorplans that really meet that criteria. Once they have a strong understanding of what you are looking for, they can search options both on and off of the market. Agents that specialize in the area often know of new options coming to the market and can give you a jump on those properties. We also network with agents who work in the area to see what opportunities are available.
Way’s To Make Your Offer Stand Out
Since there is such low inventory and we are seeing high demand, you will likely be competing with other buyers. It is important that the person you work with has a good track record and really communicates with the listing agent for the property. They need understand what terms the seller is looking for, other than price, to make sure you are put in the best position possible. Here are some of the most common ways to make your offer stand out.
- Shortening Timeframes: Once you have an accepted offer, you will have deadlines to do your inspections, review the HOA documents, get the property appraised, and get full loan approval from your lender. It is extremely common to shorten those timeframes right now, so discuss how to be more competitive with your agent. You will want shorten these timeframes, but will also need enough time to do your due diligence.
- Appraisal: If you are obtaining a loan, you will typically need an appraisal. It is the lender’s way of insuring that they are lending an appropriate amount of money in relation to the property’s value. If it comes in low, it will likely effect the amount the bank is willing to loan on the property. It is very common for people to either waive their appraisal contingency or agree in advance to pay a certain amount over the appraised value not to exceed the purchase price. You should really have a strong understanding of what it is you are agreeing to do before considering these options. While it makes your offer much stronger, you will want to understand the risks associated.
- Leaseback: Typically when a person is selling their home, they will want the funds from their departing residence to make the move to their next home. This isn’t as common in Downtown San Diego, but it does still come up. Make sure your agent is discussing the seller’s plans with the listing agent. Offering the sellers the option to stay for an agreed amount of time after the close of escrow may really set your offer apart from the competition.
These are just a few of the ways we are helping our clients get their offers accepted. Similar to our listing strategy, we discuss your goals as a buyer and decide what options will help you stand out amongst the competition.