San Diego, CA Real Estate Market Expectations Year-end And Into 2024

San Diego, CA Real Estate Market Expectations Year-end And Into 2024 with Ryan Zomorodi of Real Estate Skills

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TJones (0:00) - Welcome to foreclosure.com. My name is Tim Jones, and I'm excited to introduce you to our guest speaker, Ryan Zomorodi. Ryan thank you for taking the time to speak with us today.

Ryan (0:11) - Hey Tim, a pleasure to be here. Thanks for inviting me on today.

TJones (0:15) - We're delighted to have you. Ryan, would you tell the audience a little bit about yourself and what market you're currently focusing on?

Ryan (0:22) - Absolutely. I'm a full-time real estate investor, very passionate about the business. Got my start in 2011, more on the property management side, buying short sales and then owning and operating them. And over the years, I've had my hands in a lot of different aspects of the business, from brokerage to private money lending, fix and flips, wholesales, and my passion really is in the buy and holds. But throughout it all, I've been very focused on the distressed acquisitions of mainly single-family and small multifamily properties started in San Diego, here where I'm located, and eventually found a group of investors, and we expanded to other states. Over the years, ended up acquiring deals in over 12 different states, so I had experience with different contracts and different styles of property in different parts of the country. But ultimately, I'm finding myself gravitating back towards San Diego, where there are a lot of very unique opportunities these days.

TJones (1:20) - Thank you for sharing your journey with us. Let's dive in. What are you currently seeing in the San Diego housing market?

TJones (1:28) - Absolutely. You know, San Diego specifically has seen a little bit of a slowdown as far as price appreciation. You know, we have this massive 20% gain, you know, throughout the pandemic, throughout COVID, and just an insatiable buyer demand, really more of an inventory crisis, but of course, everyone's talking about mortgage rates having gone up, so dramatically so quickly. What's happened - it's more of an affordability crisis right now. So prices have scaled back because the buyers just are aren't there as much as they were before. It's just hard to afford these high prices of the new normal. And so, we have seen softening, I would say, anywhere from 5 to 10% from the peak. And that doesn't mean that buyers don't still want to buy, you know, obviously, San Diego real estate is very desirable. There's a lot of buyers kind of sitting on the sidelines, but we are kind of just waiting for the mortgage rates to improve, and I expect the prices to shoot right back up to where they were, and beyond once, those rates do fall, even just a little bit.

TJones (2:34) - Are you noticing any trends in San Diego, Southern California, with distressed assets like foreclosures?

Ryan (2:42) - Certainly. you know, we've seen, I'd say since the past, you know, 5, 10 years, of course, the foreclosures have kind of slowed down quite a bit, but more recently, we have seen it tick up. I do expect, you know, continuing on we're gonna see more of that kind of activity, especially with buyers, owners operators of single-family and income properties where they bought at an adjustable rate mortgage or a floating rate where now that loan is coming to Surety, and they're gonna be having to refinance in this kind of a rate environment. And simply, they just can't afford that higher rate. It's gonna destroy all the cash flow. They could go negative and be forced to either do a cash-in refinance where they're putting up a lot more capital, having to go out to their investors and raise significant amounts of capital to make the debt service affordable or they're going to have to turn over that property to a new owner. So, I would expect that that trend will continue if rates don't improve, which I don't suspect they're going to in the near term. And also, one of the very unique trends in Southern California, California at large but specifically in San Diego, is that we're seeing a lot of opportunities with distressed assets like foreclosures to be able to build on top of those properties in the form of accessory dwelling units, expanding the footprint of these properties. So, any Savvy investor looking at these properties you can add significant value through simply adding square footage through adding additional units with our accessory dwelling unit program. Certain laws that are very pro-development here really just make all the opportunities be able to see through a different lens. And it really opens up the floodgates when it comes to being able to acquire these assets and turn them into a profitable investment.

TJones (4:36) - I'd love to explore that a little further. What are your expectations for San Diego for the rest of this year? in the beginning of 2024?

Ryan (4:48) - I expect the prices to continue to decline slightly. I don't see the buyer demand really spiking up in any significant way until we have an improvement in mortgage rates. Especially going into the fourth quarter of this year is generally when the housing market slows a little bit. So I would say that we're gonna pre you must just see kind of a stalemate as we're seeing, you know, sellers, they've locked in really great mortgages over the past few years, and they're reluctant to sell unless they're getting top dollar because if they have to move, you know, every seller is a buyer. So they're gonna have to find a replacement property. And so I think it's gonna be a little bit of a, a stagnation, maybe even a little bit more of a softening than we've seen. But what's really hot these days in San Diego is this infill development. It's buying an existing property, especially when it's a distressed asset, because you can generally get a better deal. You can generally help a homeowner out of a situation and acquire property for a little bit under market value. And again, develop it from whether it's a single-family house or a small duplex into a much more dense complex of, you know, four or five, sometimes even 10, 15, 20 units on the same parcel. And San Diego is uniquely promoting these development laws, which I haven't really seen anywhere else in the country. And so through our ADU programs or bonus ADU programs, there's instances where properties that are zoned, single family can be developed into essentially unlimited ADUs, unlimited units, of course, with certain restrictions, but it really just opens up a significant value that investors can reach. You know, specifically targeting distressed assets, foreclosures, bankruptcies, short sales, whenever they come up. Because, again, you can help an owner out of a situation, but then you can turn an underperforming property into something that can provide housing for a lot more people, which is something that San Diego, in particular, very much needs.

TJones (6:52) - Well, thank you for sharing your perspective with us. How do you utilize foreclosure.com to find off-market distressed properties?

Ryan (7:03) - TJ - You know, foreclosure.com has been around for a very long time. They have the most extensive database and the most up-to-date listings of foreclosures, bankruptcies, of distressed assets really across the country. So, it just makes it so easy to hop on and find any new listings, any auctions that are happening in your area, and you can really just get a bird's eye view of any market in the country that you want to go into and really identify places to acquire new properties. So this gives you very convenient access, and once you are able to identify a property that fits your criteria where you're looking to purchase, and it literally just tells you exactly who to call. It gives you step-by-step instructions and gives you the contact information right there on the same page. So really, it couldn't be easier. And, if you're looking to acquire foreclosures distressed assets, you know, foreclosure.com is an excellent resource to do so.

TJones (8:01) - That's perfect. Well, that's all the time we have for today, but I want to take this opportunity to thank Ryan for sharing his perspectives. Thank you, Ryan.

Ryan (8:09) - Yeah, absolutely. Thanks for having me.

TJones (8:13) - Don't forget to sign up for our free email alerts on foreclosure.com. Until next time, I'm Tim Jones, and thank you for watching.