Investing in and Buying San Diego Real Estate

By: John Harris

With the high price tags and alluring views of San Diego real estate, many first time homebuyers are pushed out of the market. One way that some people hope to get their foot in the door of San Diego real estate is by purchasing a rental property that will pay for itself, or close to it. Well the truth of the matter is that this type of real estate investment isn't realistic in the San Diego real estate climate. The prices are simply too high. Because average list prices for San Diego real estate and its surrounding areas are close to $1 million, you will need to put down about 50% of your list price just to break even. Does this make the San Diego real estate market a bad investment? Not necessarily. It all depends on your goals.

One thing is certain; San Diego real estate is for the investor looking for growth, not cash flow. Although investors need to put down more initially for San Diego real estate, the appreciation is so good it's often worth being in a negative cash flow situation. You can consider an open ARM options loan or an interest only loan in this type of situation.

Prices of San Diego Real Estate

So what are these numbers we're talking about really like? In 2006 the average price of a home in San Diego county was over $700,000. What drives these numbers? An ideal climate, a diverse and well-educated community, and scenic coastal views contribute to the high demand for San Diego real estate. It's also true that the area is expected to reach maximum capacity sometime in the next decade. For this reason, many buyers are eager to buy San Diego real estate before it's too late. Carlsbad, La Jolla, and Encinitas all have active seniors who purposely chose San Diego real estate for their retirement homes.

And, oh yes, the homes. Some of the homes are breathtaking. Of course, you'd expect that with prices in the millions. But don't be fooled. Since real estate is so scarce, it's not easy to find everything you are looking for- regardless of your price range. It's been said that you can have the house you want, the price you want, or the location you want in San Diego real estate; but you can't get all three. Is this true? Probably. But for most home buyers of San Diego real estate the beauty and amenities of the area outweigh the losses.

Whether you're looking at San Diego real estate for an investment or a home, you may have to give a little to get a lot.

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