SAN DIEGO (KGTV) — San Diego renters spend years trying to save up enough to buy a home, so it may come as a surprise that some homeowners are now selling their homes to rent them back.
It's an increasingly common strategy in San Diego County, which has seen its supply of homes drop 55 percent over the last year, leading to bidding wars. Now, sellers are getting multiple offers above the asking price.
In order to remain competitive, buyers who need to sell their homes in order to qualify for their next purchase are getting that deal out of the way. They then rent back the property, generally for up to 60 days, hoping that will give them enough time to close on their next home. By removing the need to sell, the buyer becomes more attractive to the seller, who is already likely to be weighing numerous offers.
"It is a red hot sellers market and at some point, I imagine it will balance out where contingent offers will make a reappearance," said Michelle Kolker, owner of Kolker Real Estate Group. "For now, you need to have the cash in the bank."
Meagan Pomeroy listed her College Area two-bedroom, two-bathroom condo for $455,000 in April. She got seven offers in two days and is now in escrow for $487,500. That would give her a nearly $200,000 profit over what she paid for the condo in 2016.
"A little too amazing," she said. "It makes me a little nervous because now I have to go to the other side and do what my poor buyers did."
Pomeroy is renting back the unit for 60 days, seeking a similar-sized condo in the Rancho Bernardo, closer to her family. If nothing materializes, she'd have to find an apartment.
"I think it'll be worth it to get what I want and the location I want," she said. "I just gotta put in the work."
As of Thursday, there were 2,115 active listings in the county, down from 4,782 compared to a year earlier, according to the San Diego Association of Realtors. At the same time, the median price for a home in the county rose 14.9 percent to $678,000, CoreLogic reports.