There are at least two great reasons for engaging in San Diego foreclosure investing now. The first is price appreciation; the second is population growth.
Price improvements indicate greater leverage for profits while population growth means higher number of possible homebuyers.
In April, the median sales price for all single-family homes, townhomes and condos sold spiked by 15.4 percent to $285,000 from the April 2009 median price.
In San Diego County, the resale median price also spiked up by 14.7 percent to $379,000 in the first quarter, based on sales figures from the National Association of Realtors. The first-quarter median price put San Diego seventh in a ranking of 152 metropolitan areas and 16th in a ranking of price increase rate. San Diego was one of only 91 metro areas in the country that experienced price appreciation over the year.
The number of people that will likely purchase foreclosed homes for sale in the coming years has also been predicted to increase in a report recently released by the San Diego Association of Governments, a group of mayors and council members in the county.
Based on the association report, San Diego County will gain more than 30,000 persons annually over the next 2 decades and more than 10,000 housing units will be needed annually to house the same number of new households that will be formed every year.
For people involved in San Diego foreclosure investing, the population and housing projections are great. If investors can hold on to their residential properties for several more years, they can resell them at much greater profits as the competition for housing will again push home prices to higher levels.
The declining foreclosure inventory has also been pushing up home prices. In San Diego County, the number of default notices dropped by a staggering 56.5 percent from 3,600 notices in April 2009 to 2,300 in April this year. The number of homes sold through trustee sales remained the same at 2,400 units in April.
Not only foreclosure homes are declining, but also all types of homes priced below $500,000, the price range with the highest level of demand. Resale home listings have also dropped substantially, with the monthly average listings of 9,500 over the past 4 months dropping to only around 3,000. The supply of pre-owned homes for sale has fallen to a supply level of only about three months.
Similarly, foreclosure filings statewide also dropped in April significantly. Over the month, filings dropped by more than 25 percent to 69,725 postings, also marking a 28-percent drop from filings in April last year.
Although the number is big enough for investors and owner-occupant buyers looking for cheap homes in California, the sharp decline portends a lower housing stock.
With the foreclosure decline helping push up prices and the demand for housing expected to increase significantly in the coming years, people involved in San Diego foreclosure investing can expect to gain more profits especially if they can hold on to their investments for a couple more years.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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