If you are shopping attached homes in San Diego County at the moment, the market is quietly working in your favor. Not dramatically, and not everywhere, but more than most buyers realize.
Here is the setup. Attached inventory across the county is down 38% compared to last year, from 2,500 homes to 1,539. Normally that would mean a tighter, more competitive market. But demand fell by exactly the same amount, from 615 pending sales to 380, so the shortage never translated into urgency. Expected market time for attached homes is still 122 days, the same as a year ago.
Meanwhile, attached values have dropped 6.8% since July 2024. Sellers who listed expecting 2024 pricing are watching the calendar, and after four months on the market, most of them have adjusted their expectations, whether or not they have adjusted their list price.
That is leverage. Not in every building and not on every property, but on the listings that have been sitting, there is usually more room than the asking price suggests.
The lending change nobody has told you about
This is the part that matters more than the negotiating angle, and it is new enough that many buyers and more than a few agents have not caught up with it.
As of August 3, Fannie Mae and Freddie Mac eliminated their streamlined Limited Review and Streamlined Review processes for established condominium projects. Those processes allow lenders to approve a condo loan without delving deeply into the association itself.
That shortcut is gone. Lenders now have to conduct a comprehensive review covering HOA budgets, reserve funds, building maintenance history, insurance coverage, and delinquency rates. If an association is underfunded, has deferred maintenance, or carries high owner delinquency, that can now surface as a financing problem on a property that would have sailed through six months ago.
Practically, this means two things. Closing timelines on condos are likely to stretch. And some complexes that were financeable in the spring may not be financeable this fall.
What to actually do about it
Get your lender into the HOA documents as soon as possible. Request that the HOA documents be ordered on “rush”. Ask specifically about reserve funding relative to the association’s annual budget, any special assessments that have been discussed or approved, the current insurance situation, and the owner delinquency rate.
This is a reversal of how most buyers sequence a condo purchase. The usual approach is to write, open escrow, do your inspections and then receive the HOA package sometime during the contingency period, and peruse through it before you close escrow. In this lending environment, that sequence puts your deposit and your timeline at risk over something you could have checked in advance.
And if you are open to detached
The detached market is a genuinely different environment. Countywide, detached is at 96 days versus 122 for attached, and on the coast it is faster still. Cardiff by the Sea closed June at 101% of asking with a median of 8 days on market. Encinitas closed at 100% of asking in 13 days.
You will pay more and not get the pool and the clubhouse. But you also will not be underwriting somebody else’s reserve study.
If you are weighing attached against detached in Encinitas, Cardiff, or Carlsbad and want to talk it through with the actual numbers for the buildings you are looking at, get in touch.
