San Diego Housing Market News and Analysis
4 Reasons San Diego RE has gone Up
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Submitted by RightSide on March 23, 2006 - 12:05pm
First of all, I'm not questioning that there is an inflated housing market that is due for an inevitable correction. However, I think there is more to the reason for the housing bubble in San Diego then is being acknolwedged.
Here are some other possible explanations that I could propose and that I'd be curios to know if anyone has data or insights to dispute these things:
1) San Diego is experiencing a demographic change, with an increasingly larger class of people that have high net-worths and are able to comfortabley afford larger, more luxurious homes. A lot of these are retirees with low incomes and thus the median income #'s are very misleading. The affordability is actually not near as skewed as a broad analysis would have you believe.
2) Median income should be replaced with Household median income as most people getting these mortages have two incomes, which is a signficant change over the last 20 years.
3) Homes have gotten much larger in the last five years. Without comparing median price per square foot, you are actually comparing apples to oranges.
4) The weather in San Diego hasn't changed, but the city has. There are better restraunts, hotels, housing, etc. For a dramatic example of this, consider Oceanside, CA. My parents moved there about 15 years ago and it has been totally transformed from a dumpy beach town overun by prositutes and marines, to an up and coming beautiful beach city. There has been a fundamental change in that city and even if prices where flat county wide, no one could dispute that Oceanside has relatively increased its value dramatically over the last 15 years. San Diego, compared to Los Angeles, Orange County, San Francisco, Boston, New York City, etc. hs been relatively inexpensive. As San Diego matures as a city, its base value rate is adjusting upwards.
Certainly if you look nationwide, we see a housing bubble in many places, but why the discrepencies in price increase between the various locales? Boston has shitty weather and they have had a monster house run as well, why is that? Speculation you say. Ok, well if both Boston and San Diego are having a housing buble, why has one gotten higher/lower then the other?
The speculation is one part of the answer, but its not the only thing at work here. I'd like to hear why you disagree with my specific points above.
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