Por Dave Schwab
Reportero SDUN

Despite news on the national level that home sales plunged last month, Uptown real estate agents say the local market is more of a “mixed bag” right now.

“Inventory has certainly increased in Mission Hills along with average market time, and buyers are few,” said Melissa Hernholm of The Hernholm Group, a family partnership that has specialized in urban and coastal property for 13 years. “Similar to the rest of San Diego, all economic indicators suggest a strong buyers’ market.”

The good news for Mission Hills, she said, is that while average home prices have declined every year since 2006, there are hardly any short sales or bank-owned properties on the market.

“There are few distressed sales in an established and centrally located community such as Mission Hills,” she said. “So home prices are not as volatile as other neighborhoods.”

Though there is no doubt that overall sale prices have declined over the last few years, Hernholm said, several of her agency’s recent sales “prove there is still an emotional draw to this area, and buyers will pay a premium to live in Mission Hills.”

Noting Mission Hills has proven to be a very safe investment, Hernholm said San Diego is a desirable place to live, and there are certain neighborhoods—Point Loma, Coronado, La Jolla—that will always be desirable, no matter the economic indicators, and that list includes Mission Hills.

“In our most recent Monday Market Update (hernholmgroup.com) we compare Mission Hills real estate to a solid long-term growth stock such as Apple Inc.,” Hernholm said. “Mission Hills’ ‘stock’ is more affordable than it has been in the last six years, so opportunities abound for buyers who otherwise could not afford to buy in this neighborhood. We’re in a market where five years from now your neighbors will say, ‘I could have had that house for X in 2010!’ ”

There are many factors attracting buyers to Mission Hills, Hernholm said.

“There truly is no other neighborhood in San Diego that is more centrally located than Mission Hills—within a 10-minute drive to beaches, downtown, Balboa Park, the airport and sporting events,” she said. “The neighborhood is rich in both history and character as Mission Hills has more historic homes than any other neighborhood. Many of our clients say it’s one of the few real neighborhoods in San Diego.”

One challenge for buyers in Mission Hills is that homes built there in the early 1900s were not constructed with the now-desirable large kitchens, master suites and walk-in closets.

“These buyers feel like their dollar stretches farther in areas like Carmel Valley, Scripps Ranch or Mt. Helix where the homes have larger lots and tend to be newer construction,” Hernholm said. “On a more macro level, given the price point of many of the current listings in Mission Hills, jumbo (loan) financing is required. The financing and appraisal process in this market creates a significant challenge to getting deals done.”

Hernholm said good agents and wise sellers are pricing homes more in line with today’s market, and that while the headlines may lead buyers to believe that every seller is distressed, “That is not often the case in our areas of expertise.”

Hernholm said buyers get discouraged when “low ball” offers aren’t immediately accepted.

“So we would encourage them to recognize that the ‘deal’ is often already incorporated into the list price. A home purchase in San Diego is a considerable investment, so buy in a neighborhood where you love, so your investment is both a financial and emotional one,” she said.

In North Park, real estate agent Mary McTernan said the only challenge for buyers is if the home is priced under $400,000.

“Then they are competing with investors,” she said. “Investors usually will come in with cash and can close faster—making the offer stronger.”

For sellers, McTernan said, the challenge is that there are more homes coming on the market.

“If they are not willing to get their home in front of their competition by offering the buyers a better value, then they are ultimately running into receiving less by having it on the market for a longer amount of time,” she said.

According to McTernan, buyers should know that homes in North Park are older and, although they are beautiful and charming, they typically do not have new plumbing, new electric, new foundations, a new roof or new air conditioning.

“They usually have only partial upgrades,” she said. “If [buyers are] looking for all of these newer features and the thought of some of these things frightens them, they may want to look at other communities that have new builds.”

McTernan counsels homebuyers looking in North Park to “really do their research and try and work with a local agent that understands older homes.”

For home sellers, McTernan stressed, “Being in front of your competition is crucial.”

Don’t just throw your home on the market to test the waters, she said.

“You must stage it. If your home is overpriced from the beginning, your listing will become stale and ultimately get less than you would have, had you priced your home at market value,” she said.

Working with an agent who is an expert in the neighborhood is crucial, McTernan said.

“Someone who is selling homes in the area has their pulse on the market,” she said. “They know exactly what buyers are coming in with because they are coming into all of their other listings and they see what type of offers are being presented.”

Despite North Park’s age, McTernan said many people see it as an up-and-coming, desirable community.

“Within the last 10 years so much has been done to revitalize the area and people have surely noticed,” she said. “It’s a hot neighborhood and the market is still hot.”

“It is a fantastic time for buyers to purchase a home,” added Tony Azar of The Metropolitan Group, which specializes in the Hillcrest/University Heights area. “With the decrease in prices, very low mortgage interest rates and the state tax incentive program, now is truly a ‘buyer’s market.’ ”

Azar said metropolitan San Diego is a very active buyer’s market.

“When properties are priced properly at today’s market rates,” he said, “it is not uncommon to have multiple offers on the homes that are for sale.”

That active buyer’s market presents a challenge, as there are many buyers with whom to compete, Azar said.

“So buyers need to be assertive when pursuing a property, particularly when there are multiple offers in on a property,” he said.

Azar said that although they have been modest, San Diego has led the nation this year in housing price increases.

There are a multitude of reasons why metropolitan San Diego is desirable to home buyers, he said. It surrounds Balboa Park; it is just minutes to the beach, downtown, Mission Valley, Old Town and the freeways and each of the communities that make up the metro area is special in its own way.

For example, Azar said, Hillcrest attracts thousands of locals and tourists each week to its numerous restaurants, coffee houses, specialty shops, clubs and farmers market—and its “colorful vibrant atmosphere.”

“San Diego is a very special and unique city,” he said. “It has one of the best climates in the world year-round. It is also located on the beautiful Pacific Ocean and Bay. People from all over the world come to San Diego to enjoy the weather and the beauty that the city has to offer. This is why it is an incredible place to call home.”

Real estate agent Jim Abbott covers the downtown and Little Italy markets. Despite the ongoing economic recession, he said it’s still a desirable place to live.

“If you want to be cool you live downtown,” he said. “That’s all there is to it: There’s no life outside 92101. The arts are here. The real world is here. We have diversity. It’s all happening downtown.”

But Abbott noted it’s important for buyers and sellers to keep the “economic realities” of today’s market in proper perspective.

“We’ve been in the same market, partly declining, roughly for two years,” he said. “The high end remains soft, which means it’s a great time to buy high-end property.”

Abbott referred to the current real estate market as “the new normal market.”

“Anyone who’s waiting for things to get back to the way they were in 2004-05 is going to be waiting a long time,” he said, adding the continuing poor lending environment, particularly with large banks, is a drag on the market. “Banks really don’t want to loan money. They have no interest in tying up 30-year money at 4.5 percent. So what borrowers need to do in this environment is go to a reputable mortgage broker or credit union.”

Abbott said the current financing impediment “slices both ways.”

“If you’re trying to sell your house there’s very little financing,” he said. “For the person trying to buy a house, there’s very little financing. I’m telling buyers on the high end to be aggressive. If you don’t have a broker that will be aggressive on your behalf, find a new one.”

Abbott has advice for those seeking an ideal property.

“Research is the key,” he said. “Do your homework. Get the smartest broker you can find. Get information from many sources, including more than one Realtor, before you make a decision on a person to work with.”

Afton Miller is a prominent real estate agent in the neighborhood of Talmadge. She said her 25 years of experience in dealing with metropolitan San Diego has shown her that “no two homes are alike.”

Buyers appreciate the uniqueness of the older neighborhoods where there are lath and plaster walls, hardwood floors, fireplaces, arches, alcoves and niches, Miller said.

“Most buyers from the metropolitan areas can accept that they are not going to get a large master suite with a walk-in closet and master bath,” she said. “However, that is sometimes hard for [some] buyers to accept. They want all the amenities of a suburban home with the charm of a unique older home.”

The trade off, Miller said, is that “living ‘in town’ puts a buyer close to everything, whether it’s downtown, airport or the freeways. The renaissance that has taken place in North and South Park puts homeowners in walking distance to restaurants, the North Park Theatre, pubs and boutiques. This is something you just can’t get in the suburbs.”

In a neighborhood like Talmadge, which has just 1,200 homes, there is a tremendous sense of community via garage sales, neighborhood block parties and a citizen’s patrol, Miller said.

“I am often asked who buys in these older neighborhoods,” she said, adding her answer is, “Everyone does who is attracted to living in town; there is no one profile. Sometimes it is people with children or people who want children and sometimes two guys or two gals.”

Miller said there is an amazing number of people in their late 50s and 60s moving from the suburbs into town because their kids have grown up and they are tired of the traffic.

“As a buyer, the best question is ‘What’s the best house comparison to what else is out there?’ Then just go for it. Don’t get hung up in whether the market is going up soon. Buy your house for a home without putting a huge focus on appreciation. That will happen in time, but it’s going to take longer than it used to,” she said.

Sarah Schoeffel of Rancho Buena Vista Real Estate, which mainly serves the South Park/Golden Hill area, said, “Properties are selling, but they need to be priced correctly. There are lots of buyers looking to take advantage of today’s low interest rates, but they are cautious.”

Nonetheless, Schoeffel is positive as she looks ahead to the future of the real estate market in both neighborhoods.

“The future is bright,” she said. “The neighborhood continues to evolve and is just getting better and better. We are seeing an influx of young families again, especially now that we have great public schools that they can walk to.”

Schoeffel said the South Park/Golden Hill market is appealing.

“Buyers are attracted to this area because they love the classic architecture styles and the fact that every home is unique—the vibrant mix of shops and restaurants and interesting people, along with the excellent central location and ‘walkable’ neighborhoods,” she said.

One challenge for buying and selling in the neighborhood, however, is “dealing with issues that can come with older homes, such as foundation problems,” she said.

The Bankers Hill market is often served by agent Garold Wampler, who characterized the real estate “mood” in the neighborhood as “cautiously optimistic.”

Wampler said the area considered to be Bankers Hill actually spans two ZIP codes—92103 and 92101.

“Because each of those ZIP codes has other neighborhoods with characteristics as unique as Bankers Hill, statistics tend to indicate activity is on the upswing,” he said.

For the seven-month period ending July 31, Wampler said the number of closings in Bankers Hill has increased about 15 percent.

“Prices, too, have held steady with a year-to-date median price of about $42,000 compared to ’09s median of about $400,000,” he said, adding average prices also increased. “But it has taken a bit longer for properties to close. So a seller has had to be a bit more patient, but has reaped the reward of a stronger sales price.”

Wampler noted the demographic for Bankers Hill is decidedly different than many other Uptown neighborhoods—80 percent of properties sold there are not single-family homes.

“So one is looking at a demographic that wants the convenience of condominium living with close proximity to the amenities, such as Hillcrest shopping and eating, the downtown area five minutes away, walkability to Balboa Park and an airport less than 10 minutes from home,” he said.

Probably the biggest challenge right now in the Bankers Hill market is the increase in the number of property sales that are short sales, he said.

“It is a trend that I see continuing for the next couple or three years in all neighborhoods,” Wampler said. “Statistically, short sales in Bankers Hill were about 19 percent of closings for the first seven months of last year, versus about 31 percent for the same period this year.”

But no one should be deterred from being in the market right now, he said.

“Interest rates are historically low. Prices are very reasonable. It is a great time to buy,” he asserted.

Mike Tristany of the Tristany Real Estate Group, which has an emphasis on real estate in the Kensington neighborhood, said he feels the challenges for buying real estate are not coming from the neighborhoods, the homes available or the prices.

“The challenge is job stability—and that is what is keeping many buyers at bay,” he said. “If there is no concern about job stability then it is an incredible time to get into the market.”

Tristany stressed buyers should realize interest rates are at historic lows and that prices are down.

“Opportunity reigns,” he said. “Most sellers are also willing to negotiate on top of their lower prices.”

However, indecisive buyers do create an uncertain atmosphere in the real estate market, Tristany said.

“They are getting mixed signals from the media and trying to time the market—nearly impossible to do,” he said. “If prices are down and rates are down, don’t try to second guess what is going to happen. Buying is for the long term so regardless of what happens immediately, time will make it all worthwhile.”

Tristany added home prices are “fluctuating a bit” with some sellers coming down a bit more to make a sale happen.

“San Diego’s metro communities have always fared well over the long haul,” Tristany said. “Even with a slowdown and prices down, metro has always rebounded and rebounded well. We are central with low commute times and that is always desirable.”

Tristany’s prediction for the future? “Today’s buyers are going to reap great benefits over the next 10 years,” he said.