Home prices in San Diego’s senior communities on a rebound.
The Lawhead Team came across an interesting article from the North County Times about the home prices in Senior Communities within San Diego on a rebound. Check out this informative article:
HOUSING: Home prices in senior communities rebound.
Home prices in senior communities in North San Diego and Southwest Riverside counties shot up this summer after hitting bottom last spring, according to a North County Times analysis of Realtor transaction data.
Senior communities come with covenants that restrict occupants by age, typically 55 years old or older, and sometimes 62 and older. The value of 55-plus communities sank faster than the overall housing market during a price collapse that began in 2006.
But the drop in value created an opportunity for investors, who started plucking up the houses last year and renting them out. That cut down the number of houses available this year, when prospective buyers returned in droves, pushing up home prices, Realtors said.
“There’s more activity in general for people who want them for themselves,” said Dennis Kaiser, a Carlsbad Realtor who specializes in houses in senior communities. “Home prices have been heading up a little bit more, we’ve seen the inventory shrink.”
The median price for a condo or house in senior communities in North County and Southwest Riverside rose to $185,500 in August, up 12.2 percent compared to August a year earlier, according to a North County Times analysis of data provided by San Marcos Realtor Gregory A. Moser.
The median price among all homes in North San Diego County rose 3.8 percent over the same period, according to the North San Diego County Association of Realtors. Similar data was not available for Southwest Riverside.
Home sales followed a similar pattern: Homeowners picked up 148 homes in senior communities in August, up 59.1 percent from a year earlier. North County overall home sales in August rose 39 percent over the same period.
Homes in senior communities are typically bought for cash, usually after a purchaser sells the larger home they raised their family in. The dearth of loans meant senior communities had fewer short sales and foreclosures.
A broader house price crisis that began in 2006 left homeowners who might otherwise be interested in senior communities unable to sell their houses for prices they wanted or needed. But homes in the communities kept coming on the market, as their occupants died or moved into assisted living. High supply and low demand created a price collapse of 59.1 percent from a peak in February 2006 to a bottom of $122,500 in February 2011.
But starting last year, investors, already active in the regular housing market, discovered good deals in some retirement communities, especially those in Southwest Riverside County, according to Don Haas, senior community Realtor based in Sun City.
“It had just gone nuts,” he said. “Every offer was cash it seemed, every one of them was investor buy.”
Realtors who work in North County senior communities said they saw a lot fewer investor buys, but they did see some.
Morgan Cannon is a property investor native to California but living in Paris. He invested in three houses in 55+ communities this spring.
“I think senior communities provide stable tenants,” Cannon said. “Most of them take pride in the places that they’re renting and they’re living in, fixing up the gardens and all that. So far I haven’t seen too many wild parties.”
Cannon said he was able to buy properties for between $150,000 and $165,000, and he expects to make 7 or 8 percent annual return on each. He’s planning to hold for the long term. Any benefits from price growth would be a bonus, he said.
Meanwhile, buyers have returned to the senior market in force this spring, agents said.
“I think buyers are accepting that home prices are at the bottom and money (loans) is not likely to go lower,” said Don Strickland, a Realtor who sells houses in Ocean Hills Country Club in Oceanside. “Affordability is perhaps at its best in years.”
Strickland said as buyers have plucked up houses, the number of houses for sale in the community fell from the mid-50s last year to 10 in September. Lower inventory has forced buyers to bid up prices, pushing up the median price.
“I know the past two weeks, I’m getting multiple offers on several of my listings,” she said. “Which is rare.”
This article on San Diego’s senior community home prices can be found at: http://www.nctimes.com/business/housing-home-prices-in-senior-communities-rebound/article_735592b8-2840-5082-bf68-698acaa053ce.html