Is Now a Good Time to Buy a House in San Diego, CA?

Is now a good time to buy a house in San Diego, California? That’s a good question, and we’ll show you how to answer it for yourself. After all, only you can decide if now is a good time for you to buy a home in San Diego.

Let’s start with a quick housing market update, to lay the groundwork.

The 2017 San Diego Real Estate Market

Home prices across San Diego County rose steadily during 2016, and they were still rising at the start of 2017. According to the real estate data company Zillow, the median home price in San Diego rose 5.6% between February 2016 and February 2017, to land at $552,800. (Those were the most recent figures available at the time of publication.)

Home prices are expected to continue rising throughout 2017, though possibly at a slower pace than what we’ve seen in the last few years. San Diego is a popular area that attracts people from elsewhere in the state and country, and the local housing market benefits from this attraction.

Related: San Diego housing forecast

Mortgage rates have also risen in recent months. In fact, the average rate for a 30-year fixed-rate mortgage loan rose by more than 50 basis points (0.50%) between November 2016 and February 2017. This is based on the weekly survey conducted by Freddie Mac. This means that mortgage loans and home are more expensive than last year. And they might keep moving north. So buying now versus later in the year might save you money.

Is Now a Good Time to Buy a House?

Which brings us back to the question at hand. Is now a good time to buy a house in San Diego, in early 2017? From a financial perspective, one could argue that it makes sense to buy sooner rather than later.

Housing analysts and economists expect home prices in the area to continue rising in 2017. Additionally, the Mortgage Bankers Association recently predicted that mortgage rates would likely do the same, rising gradually between now and the end of 2017.

If these predictions turn out to be true, it means that San Diego home buyers who postpone their purchases until later in the year could end up paying more for a home and for a mortgage loan. So a strong case could be made for acting sooner.

Three Important Questions to Ask Yourself

But those are just market factors. To determine if now is a good time to buy a house in San Diego, you also have to consider a few personal factors.

Here are three important questions to ask yourself:

1. Is my financial house in order? If you have a lot of debt right now, and you’re struggling to keep up with your bills, now might not be a good time to buy a home. On the other hand, if you’re on top of your current monthly expenses — and you’re still able to put money aside each month — you might be in a good position to take on a mortgage loan. Financial discipline and responsibility are important characteristics for a homeowner. Do you have those characteristics?

2. Am I staying put for a while? Do you plan to remain in the San Diego area for the next three to five years (or ideally longer)? If so, it might make sense to buy a home in the area. There are some transition costs associated with buying a house. If you stick around long enough, rising home prices may eventually surpass these transitional costs. But if you plan to move again in a couple of years, you might be better off renting from a financial standpoint.

3. Do I qualify for a mortgage loan? If you have the means to pay cash for a house, this question doesn’t apply to you. But most home buyers in San Diego use mortgage loan to help finance their purchases, and that’s who we’re speaking to here. Before entering the real estate market, it would be wise to speak to a mortgage lender to see if you’re a good candidate for a loan (and to find out how much you can borrow). This is commonly referred to as “pre-approval,” and you can learn more about it here.