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San Diego is one of America’s top four luxury home markets (the others being Malibu, CA; Austin, TX; and Arlington, VA). Affluent home buyers love the San Diego lifestyle, culture, and economic landscape. You may have read about some of San Diego’s exciting real estate developments in my recent March blog post. Despite the COVID-19 economic downturn, things are looking up for San Diego. According to the San Diego EDC, May unemployment peaked at 16% instead of the anticipated 30%. Since the underlying economy is strong, we’re seeing a spike in the popularity of jumbo loans in San Diego.

What’s Fueling the Rise of Jumbo Loans in San Diego?

Businesses are expected to see a strong recovery by mid-summer. According to Ray Major, Chief Economist at San Diego Association of Governments, the service industry downturn is predominantly offset by San Diego’s military, biotech, and health care sectors. In fact, San Diego hosts the largest concentration of military personnel in the United States. The city is home to 60% of the U.S. Naval fleet and 1/3 of active-duty U.S. Marines. And, no surprise — sunny San Diego is the preferred destination of veterans returning from Afghanistan and Iraq.

Major also noted that about 45% of our workforce comprises self-employed individuals and small business owners. This sector saw a big reduction in unemployment in May and should see increasing job growth throughout the summer. Generally, these numbers show trends, not just blips on the economic map. And, these trends are reflected in the fact that San Diego’s housing market is recovering — at a surprising pace. Yes, home sales are down 22.5% compared to last year. However, this drop is far lower than that in other major metropolitan areas:

  • Pittsburgh, PA (down 74.4%)
  • Detroit, MI (down 66.8%)
  • Los Angeles, CA (down 58.7%)

San Diego real estate sales rose by 23.1% in April 2020.

  • Pending sales were up 6.2% week over week as of the seven days ending April 19.
  • Year-to-date (Jan to May) numbers show the median sales price rose by 1.3%.
  • In April, the time to sell a home priced above $1.25 million decreased from 316 days to 294 days. In light of COVID-19, luxury buyers from Beverly Hills and Los Angeles began pivoting towards high-end properties in San Diego County. In addition, pending sales of homes priced at more than $1.25 million dollars rose by 12% that month.
  • The San Diego economy remains resilient, with telemedicine startups like AristaMD and education disrupters like TakeLessons thriving amidst the COVID-19 crisis.

Financing Your New Luxury Home

We see the luxury home market in San Diego gaining ground or “coming up on the rails,” as they say in Del Mar. So, now may be a good time to consider jumbo loan financing. There are, of course, three obvious ways to buy a high-end property in San Diego County:

  • Use the proceeds from a previous sale.
  • Raise funds by selling stocks. As of this writing, all of the main stock sectors are showing positive gains.
  • Apply for a jumbo loan.

Types of Jumbo Loans in San Diego

Most major banks and mortgage companies offer jumbo loans to their high-net-worth clients. Here are just two examples.

Guaranteed Rate launched its GR Flex Power jumbo loan program in 2017. Loans of up to $5 million are available with a 5%-15% down payment depending on:

  • The loan amount
  • Whether the borrower applies for a fixed-rate, ARM, or interest-only loan
  • The borrower’s credit score
  • Whether the home will be a primary residence or second home

GR Flex Power loans also include:

  • Low interest and guaranteed rates
  • Low fees
  • In-house underwriting for a faster and more seamless closing process
  • No PMI
  • Up to 50% of total debt service to income
  • Asset requirements as low as six months

Jumbo Mortgage Co. (Bank of England Mortgages) headquartered in New York City does 40% to 50% of its business in California. It offers attractive mortgage loan terms:

  • Down payments as low as 5% for loans up to $5 million
  • The use of personal and business bank account statements as proof of income
  • The acceptance of stock certificates and retirement account funds as collateral
  • Approvals for borrowers whose credit scores fall below 600

The above comprises just two types of jumbo loans. These examples aren’t exhaustive and shouldn’t be taken as endorsements. Borrowers should do careful research before deciding on financing options. To start, read up about jumbo loans at Nerdwallet and Experian. If you’re buying in San Diego and need relevant info about jumbo loans in the region, get in touch with me. I answer all serious inquiries and will make every effort to get you the info you need.

Considering Jumbo Loans in San Diego? Work With Nicholas Zamonis to Find the Home of Your Dreams

San Diego County is one of the best places to own a luxury home or invest in high-end real estate. Our economy consistently outperforms that of other regions in California, and we offer a wide range of oceanfront and country estate properties. And, it’s obvious that even Microsoft’s founder agrees with this assessment.

In March 2020, Bill and Melinda Gates bought a $43 million dollar Del Mar mansion, surpassing the previous purchase record in San Diego County by $8 million dollars. The actual square footage of the home is 5,800 sq ft. However, amenities like a glass-tiled pool, 10-person spa, and spacious guest houses extend the square footage to over 10,000 sq ft. Whatever your preferences, we have the homes, economic climate, and culture to make owning a high-end property an enviable investment in San Diego County.