San Elijo Hills Real Estate Market Update by Nicolas Jonville


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The Real Estate Roller Coaster

Article by Nicolas Jonville, Jonville Team
(reprint from our Share San Elijo article 1/2014)

In the early spring of 2013, we wrote an article informing our community of a sharp turn for the real estate market in San Diego County and San Elijo Hills. San Elijo Hills home values experienced a huge price hike in the spring and early summer of 2013, in all categories, from the smallest condos to the largest homes.

This strong appreciation (nearly 15% over a 5 month period) was the result of a combination of factors, including a very low inventory of homes for sale and high buyer demand. This boost in buyer demand was the result of confidence in the economic recovery, with unemployment rates on a study improvement, record low interest rates (mid 3% for a 30 year fixed conventional mortgage), easing of the lender’s guidelines, as well as steady rent increases, among other factors.

More specific to our community were record breaking API scores within our local schools, the general community appeal and design, along with competitive prices compared to other coastal communities.

March-June 2013 resulted in very steady property value increases with multiple offers on a number of properties, creating over-bidding on many of the homes for sale. A 15% price hike in just a few months!

This summer showed a leveling off of the larger home prices, mainly due to a larger inventory and higher interest rates, while smaller, more affordable property home values were still increasing but at a slower pace (approx. 0.5 to 1% monthly trend). The same continued throughout the fall of 2013.

Our local market has shifted away from distressed properties

What are the expectations for 2014?
We are expecting a steady year for home values in 2014 considering the strong demand and limited supply. We are expecting price gains next year to be about half as strong as in 2013, when sellers stayed on the sidelines creating a shortage of inventory.

This is good news! "For a sustainable recovery you want to see more balance between buyers and sellers," says David Stiff, chief economist at CoreLogic Case-Shiller, which is forecasting a 6.8% rise in the US median home value for 2014. We are expecting about the same in San Elijo Hills, possibly slightly higher, considering that prices increased far above the US average in 2013.

However, several wild cards remain and can affect our regional and local markets:
Interest rates, still at record low levels, have very little room to move down and will most likely rise with the FED stopping or reducing their quantitative easing. We may see a rise in interest rates reaching 5% or higher for a 30 year fixed mortgage (from 4.5% in Dec 2013, up from 3.75% early 2013). The overall economic situation will dictate the FED policies. The more economic improvements are felt, the more chances the rates will increase. Since most buyers are financing a large part of their purchase, an increase in rates strongly affect their affordability. A 1% increase in the interest rate represents approximately 20% more in monthly housing costs, a significant difference. This can affect the buyers’ buying power and therefore the demand.

Fixed Mortgage

The Federal loans (FHA) have loan limits that are adjusting in January 2014 to $546,250, compared to $697,500 in previous years. This adjustment will have some impact on affordability.

The real estate burst of 2008-2011 has created some fear. Many buyers are making their moves with caution. Any slow-down in the economic recovery could impact the housing demand.

Home Sales

Larger, more expensive homes will most likely feel tame percentage increases compared to smaller units, considering lighter demand for larger homes (due to affordability) and possible interest rate increases that would limit the purchase power. We have also seen an increasing number of buyers downsizing, which increases the demand for smaller structures.

You could wait for your dream home but if you need to finance your purchase, you could pay a price for the delay considering the high likelihood of strong interest rate increases that could be in the 5% range in 2014.

If you are considering buying investment properties and financing the purchase, it may be wise to purchase before interest rates rise, which again is likely to occur in 2014.
When dealing with multiple bids, make a reasonable offer and be well prepared to show all your strength to the sellers. We have our buyers pre-approved and often with an underwriter’s approval- almost as good as cash! This makes a strong difference along with other key strategies.

If you list too early you could leave some money on the table, but waiting too long might mean the end of the high demand and multiple offers due to interest rate increases. Timing the market perfectly is almost impossible with so many components involved. Keep an eye on the inventory, market time and prices, and build a strategic plan with your real estate professional.

When buying or selling a home, whether traditional or short sale, there are numerous aspects to consider. Every year, we consult and build strategies with families who each have their own needs, desires and budget. We provide information and expertise to enlighten them with the process and help them build their real estate plans. From appropriate pricing to strong marketing, negotiations to appraisal, these aspects need to be handled with care and expertise by professionals who are dedicated to your best interest and are knowledgeable of the market and contract specifics. Our local presence, knowledge of the market and strong marketing program has been key to help our clients achieve successful real estate planning. We gladly offer our advice and services.

Nicolas Jonville, Owner/Broker
Associate of The Jonville Team with Keller Williams Realty
1215 San Elijo Rd in San Elijo Hills, 760-471-5098,
(BRE Lic# 01410224/01417209)

See More Homes for Sale in San Elijo Hills!

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Home Value

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Belmont/ San Elijo Hills

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Village Square

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For Lease at $2,450/Mth

Mission Beach

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San Diego

San Diego / North Park

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2 bed / 2 bath, 748 ESF
Offered at $299,000 – Investors special!

Listings Wanted
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What Our Clients Say We had the most wonderful experience with both selling and buying our home through the Jonville Team. As a company they are efficient, honest, and thorough. As individuals they are compassionate, patient, and kind. I would most highly recommend them! We absolutely adored Jena who helped us sell, and Stephanie who patiently helped us scour North County to find the perfect home. A huge THANK YOU to the Jonville Team! – Anna, Bobby and family, San Elijo Hills.

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