Guide to Buying a Home in San Diego in 2017

Are you thinking about buying a home in San Diego in 2017? If so, you probably have questions about the local real estate market, home prices, and similar topics. This guide will bring you up to speed on all of these topics, and more.

Buying a Home in San Diego in 2017: Five Things to Know

Economists are forecasting a modest increase in San Diego home prices during 2017. Mortgage rates will start the year higher than they were at the start of 2016. Borrowers across the county will enjoy higher loan limits in 2017. These are just a few of the trends you should know about when buying a home in San Diego in 2017.

1. Home prices will probably continue rising in 2017, but not by much.

According to the real estate data company Zillow, home prices in San Diego rose by 5.3% during 2016. But their economists are forecasting smaller gains in 2017.

At the end of 2016, the company’s website stated: “San Diego home values have gone up 5.3% over the past year and Zillow predicts they will rise 1.7% within the next year.”

2. Demand is strongest at the lower end of the price spectrum.

In October of 2016, Chris Thornberg (economist and founding partner of Beacon Economics) told the San Diego Union Tribune that the local real estate market was particularly active at the lower end of the spectrum. Pricier properties, by comparison, are taking much longer to sell.

If you’re buying a comparatively low-priced home in San Diego in 2017, you should be prepared for competition. That’s because there is more demand in the “starter home” price range. This is often the case, since there are more buyers within the lower price tiers.

For more on this subject, check out our San Diego housing market forecast.

3. Mortgage rates are higher than a year ago, thanks to a recent surge.

Buyers who are buying a home in San Diego at the start of 2017 will encounter higher mortgage rates than those who purchased a year ago. This is due to an end-of-the-year surge in mortgage rates that began in November of 2016.

The chart above shows how average mortgage rates have moved over the last 12 months, as of December 23, 2016. On the right side of this chart, you can see the surge in rates that occurred during November and December. As a result of this trend, people buying a home in San Diego at the start of 2017 will encounter higher mortgage rates.

Related: Average mortgage payments in San Diego

Bear in mind, the above numbers are just averages. Individual rates vary based on a variety of factors, including the type of loan you use, your credit score, etc. Please contact us if you would like to receive a rate quote for a mortgage loan.

4. Higher loan limits have been set for FHA, VA and conventional loans.

Here’s some good news for those planning to buy a home in San Diego in 2017. Federal housing officials have increased the loan limits for FHA, VA and conventional mortgage loans. This means San Diego home buyers could have more properties to choose from without venturing into “jumbo” mortgage territory. This change was made in response to the significant home-price gains that occurred nationwide in 2016.

FHA, VA and conventional (conforming) loan limits will go up to $612,950 in 2017, for a single-family home purchase.

5. San Diego predicted to be a hot real estate market in 2017.

Despite Zillow’s forecast for smaller home-price gains in 2017, San Diego is still predicted to be a “hot” real estate market over the coming months.

In December 2016, Realtor.com published a ranking of the top markets to watch in 2017, based on expected home sales and price growth. Out of the largest 100 cities in the U.S., San Diego was ranked at #15. The takeaway here is that anyone buying a home in San Diego in 2017 should be prepared for some stiff competition.

Related: California first-time buyer guide

Disclaimer: This article contains predictions and forecasts provided by third parties not associated with our company. We have presented them here as an educational service to our readers.