I am a 27 year resident of San Diego and a real estate broker and firm owner. I am very qualified to answer your question. The type of home you describe starts at about $700,000 even in this market. There are condos in the price range you describe. Foreclosed homes are selling for nearly the same price as non-foreclosed homes: lower than before but not as low as you describe. I have lived in and near the area you describe and believe that you should probably, for now, abandon this particular area and concentrate on getting a GREAT house for that price. I suggest zip codes 92123, 92111, 92110 and 92117. I love the cheap houses in 92116, particularly north of Adams Avenue. We have a wealth of homes in your price range. Don't miss your own buyer's market by being fixated on Del Mar and Carmel Valley. Please feel free to view homes for free, anonymously on my website!
I live in Torrey Hills and drive through Del Mar and La Jolla frequently. You will find NOTHING for 300-400K in the nicest parts (we're paying 2100/mo for an APT)...Even with a foreclosure you are getting your hopes up. so sorry but I know ur thinking the area is great but there are no homes for sale around here at the moment. Everyone is just holding on..and even if people go under with their HUGE loans I would never assume it would go that low. I have grown up in San Diego and know almost every part of it, so please feel free to tell me more about what ur looking for (I know some great places for cute historic homes)..or if u def. want something closer to the ocean you would want to go N of Encinitas or S of La Jolla for that price. PB is too much of a party town...Oceanside is too military. Escondido (where I grew up) has a great downtown and is very much for the new age...You may LOVE the funkiness of Encinitas/Leucadia...though nothing W of the 5 will be for that price...still not sure but I LOVE SD and have been here for my 25 years, so good luck and feel free to update me on what kind of house you're thinking of and I will try to better tell u what city to go for!
Once you decide its time to buy.. interview realtors and a loan officers for your business. I would not waste your time or the realtors time until you are absolutely sure you are ready to buy.
While it's true that prices are soft, you are a little off in your expectations. The price for the area you are looking in means you'll be able to buy a condo with less than 1,000 square feet. Move further north and you can get more for your money. Move up to Oceanside and you can get a house but don't be shy. Jump in with both feet! Step 1 is to get preapproved for the purchase from a direct lender. Step 2 pick a realtor that you are comfortable with and start looking. There's never been a better time to buy. Rates are low and prices are good. When rates go up you'll lose some purchasing power. How much is between you and your lender and the rate. If you want to wait 8-12 months it's too early to start looking. You can be in a home in 40 days!