A Beginner’s Guide to Buying a Home in San Diego

Daniel Schroeder, Relationship Manager, First Republic Bank
August 24, 2016

Visit San Diego and it’s easy to understand the appeal of buying a home in this coastal Southern California city. The lifestyle is laid back, the beaches are stunning and the city offers everything from a vibrant craft beer and food scene to a burgeoning startup community.

Aspiring transplants should, however, do some advance research to ensure they’re positioned to make the most of the city’s unique real estate market. Everything, from the impact of ocean views on property prices to the unexpected challenges associated with having a lawn, needs to be taken into consideration before you make the decision to move.

Pay attention to the following guidelines and in no time, you could be calling San Diego home.

It’s all about the ocean

Looking at San Diego through a broad lens, the median home price reached $593,700 this summer, the highest of the year so far. Note that while this number may seem attractive,, you’d need to look at inland communities to find a home in that price range.  

As with all cities, prices vary by neighborhood. But home buyers should understand the huge impact a key factor in the local real estate market – the ocean – will have on their search. Online real estate firm Zillow reports that the median value of waterfront homes across the country is more than double the median value of all homes. Proximity to a beach can make a neighborhood more costly, and having even a small view of the ocean increases home prices.

It’s no surprise then that neighborhoods and communities west of I-5 and closer to the Pacific are more desirable. Some areas north of the city, such as La Jolla and Del Mar, as well as neighborhoods inside the city limits, such as Little Italy and Point Loma, are just a short distance from the water – and require residents to pay for that access.

California dreaming, urban living

Do you yearn for a walkable urban experience that will allow you to live, work and play in the same neighborhood? If so, consider investigating the city’s vast array of condos, many of which combine the best of city life with beach access. San Diego’s downtown is in the midst of a development boom: More than 1,100 new condos, many of them luxury, are currently slated for construction.

If you’re new to the state, there are other aspects of buying a home in California that are important to consider. For example, property taxes can vary by city and county, and depending on location, may add significant costs to your house payment.

In addition, home buyers who dream of a great expanse of green grass may be in for surprise. Like many other California cities, San Diego prioritizes water conservation to mitigate the effects of the state’s ongoing drought. This has led to various water-use restrictions, making watering your lawn allowed only on certain days of the week or, in more severe situations, not at all. If you’re planning on buying a property with lots of lawn, that’s something to consider. Many San Diego homebuyers have shifted their focus from expansive properties with large yards to more modest properties in more walkable areas.

A (mostly) seller’s market

San Diego’s housing inventory remains near historic lows. Well-priced properties often receive multiple offers, driving up prices and making it harder for first-time homebuyers to find properties within their budget. That said, demand does vary by area and can change with buyer trends.

For example, Rancho Santa Fe is an upscale community in north San Diego County known for its expansive multimillion-dollar estates. As many buyers lean away from these larger properties and the added maintenance costs that come with them, dozens of well-priced properties have begun to sit on the market for extended periods. This represents an excellent opportunity for the right buyer.

Making the right move

Regardless of which San Diego neighborhood you ultimately favor, you’ll want to be as prepared as possible before you begin making offers. Talk to your lender about what mortgage options are best for you and how soon you’ll be able to close, as a shorter timeline can often provide an edge over other buyers. If you’re selling another home before you buy, investigate loans that can help you avoid contingent offers which are usually less desirable to sellers.

Moving to San Diego can be your California dream come true. Figure out what makes this unique real estate market tick, and you’ll be on track for a move that might just increase your beach time and enrich your life.  

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