San Diego Single Family Home Market

Jan 29, 2021

A 1031 Exchange on a Condo for a House in Temecula


LRS has been managing and selling single family homes, condo's, and townhomes in San Diego since 2005. We have been leasing, managing and selling single family homes since 1988 in 7 counties in Southern California. Through good times, bad times and yes, even strange times. We have never seen a single family home market as strong and unique as the San Diego area. Nothing stays on the market for any length of time. 

Prices have skyrocketed and we browse the MLS, we see home after home in the pending column. Prices are soaring, and some San Diego residents are being priced out of the market. Even the mountain community of Julian, east of San Diego, where a couple of years ago homes sold at a “snail pace” is booming. Investors who love the San Diego life style and economic climate are asking where do we buy?


When I think of the areas around San Diego to purchase a single family home to live in or as an investment property I think you can find the best values in Temecula, in southern Riverside County. I will share a story with you. One of my clients did a 1031 exchange on a condo. Joy, had a condo that she lived in then rented for years. The property was cash flow positive approximately $400 per month but she had a $500/month HOA payment. When her tenant had given notice last February 2020, she asked me if I could find her a single family home in San Diego like San Marcos without an HOA payment that she could 1031 exchange. We determined her sale price of her condo would be about $430k. 

There were some smaller homes in Vista that were within her range, but they were older and would need a lot of work to make the situation work. Joy didn't want anything to do with a fixer upper project. I told her she should look in Temecula. We learned the different zip codes of Temecula and the areas that were getting the highest rents. We ended up selling her condo and getting an 1835 sqft single family home 3 bed/ 2.5 built in 2001 with a $105/month HOA. It rents for $2400/mo. The amount of interest for that rental was in my top 2 for demand of all the rentals I did in 2020. Mind you, this happened in July 2020 during the pandemic and still demand was through the roof. 

I had more applications than I knew what to do with. 

The other lesson we learned is a low-cost HOA is preferable to no HOA. Without an HOA you can end up with homes painted pink and purple as your neighbors or the dreaded car-on-blocks in the front yard next door.

All in all, Temecula has newer single family homes in southern California within driving distance to San Diego, Orange County and Riverside. We all know single family homes appreciate the most. If you can get a newer home with low maintenance, a low HOA payment, incredible rental demand, positive cashflow, and excellent appreciation, what more can you ask for?

If you are looking in the San Diego market for a single family or multi-family home to buy or lease give Russell a call at 619 867 1713. 


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