Buyers and investors operating in San Diego continue to report being outbid, even when offering more than the asking price. So is the San Diego market too hot, or is something else going on? Is flipping San Diego properties still as profitable as it was in the past?
It’s worth noting that some of these deals, which are going for “more than asking price,” are still selling way below ARV (after-repair-value). In fact, they are typically 30% below previous highs, which they are sure to hit again soon. The resulting price is therefore not a bad value to those that understand the San Diego market.
Understand that asking prices are frequently manipulated to create bidding wars and often have nothing to do with value. So do not fret at the sight of a larger than advertised price tag.
Of course, there is no ignoring the massive influence of overseas buyers engaging in real estate investing in San Diego either.
Some complain these buyers are making it too competitive, but this doesn’t mean that they are overpaying and won’t see great returns. Compare these home prices with markets like central London, where the average luxury property price is over 2 million Pounds (that’s 3 to 4 million US dollars). In comparison, Southern California real estate is dirt cheap, an absolute bargain. The returns could be a lot better than high priced regions around the world, not to mention the weather.
The thing about central London, Hong Kong, and even parts of New York; is that they evolved into their own asset classes. Their values are no longer tied to or relevant to local jobs, wages and GDP. They are superior wealth protection vehicles for global investors and continue to provide acceptable yields. This could certainly be a trend emerging in some high end communities in Southern California too. Flipping San Diego homes can provide investors with similar wealth protection.
These top of the range homes may not be great for everyone, even though there are certainly golden nuggets to be discovered. However, flipping San Diego properties really offers an incredibly diverse amount of opportunities which are as varied as the landscape and views. Whatever your strategy and priorities are – you can find deals here, you just have to look in the right direction.
