Say what?
In 2004, San Diego real estate was ranked as the least affordable in the United States. Thousands of San Diegans, priced out of the coastal market, moved to Temecula, Murietta and other outlying and inland areas where homes were more affordable.
These days, according to the National Association of Homebuilders, San Diego has slipped to 16th place in California, with an improved 10.1 percent affordability for median income earners. That is just a whisper above San Bernardino-Riverside and Ontario Counties’ 10.2 percent.
This is phenomenal news, because San Bernardino County has traditionally been home to some of the most affordable real estate in California–and few might have imagined that coastal San Diego would approach the Inland Empire’s affordability levels.
In searching for a market bottom, San Diego has now tied with Detroit in ranking third in the nation for dropping home prices, sharing a staggering 9.6 percent drop in pricing during the past year. This is according to a recent Standard & Poor/Case-Schiller study recently reported in the San Diego Union Tribune.
All of this might lead one to think that the San Diego economy is in the same tank as Detroit, or that it has lost its perfect balmy climate and turned into a windy high desert.
But that just ain’t so….
And I don’t know of any period in recent history when San Diego real estate has been compared to Detroit’s.
By my calculations, something is maladjusted when San Diego real estate has nearly the same affordability level as that in San Bernardino or Riverside Counties–and has the same drop in home prices as depressed Detroit. This occurs despite San Diego’s strong economy, low unemployment, and being a premier destination for tourists and affluent international retirees.
Bubble bloggers and others may take aim at me for this prediction, but I believe the muddy bottom for San Diego real estate market is near.
After all, when San Diego gets thrown into the same tub with Detroit and San Bernardino, we just might have a perfect example of the baby being thrown out with the bathwater.
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San Diego County Realtors Mike and Roberta Murphy represent buyers and sellers of real estate in Carlsbad, Encinitas, La Costa, Rancho Santa Fe, La Jolla, Del Mar, Oceanside, San Marcos and Vista.
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Roberta
Does that look like a cool picture or what?
Cold in Wisconsin now
Tom Braatz
Roberta - No matter what the statistics show - I just can't compare San Diego and Detroit, unless you're contrasting rather than comparing.
Tom: I love the picture and am sitting at my desk awaiting a (much needed) record rainfall.
Hoping it falls slow and steady!
Sharon:
Our local bubble bloggers would have all believe that San Diego is in worse shape than Detroit. I did find the statistics interesting, though, and have to believe that Florida, Arizona and California will be the first states to recover.
Sunshine wins.
I think this is a case of "the higher you are, the more you have to fall." Detroit has been in a downward trend, and a bad market only amplified that. On the other hand, San Diego was flourishing and home prices were in a consistant rise. At the time of the bursting bubble, the inflated prices of a $800,000+ single family ranch with 2 bedrooms and limited space seemed insane if you could move inland and buy twice the house, new construction, in a fine neighborhood for more than 1/2 the San Diego price. And the bonus is that this 1/2 priced house is still a better short term investment...as the market recovers, it will take less time for a reasonably priced suburban home to improve it's value compared to the house that the market just chewed up and spit out.
Don't worry, San Deigo is no Detroit and that 800,000+ will still sell for 800,000+
There is another way that Detroit and San Diego are sister cities but it won't be seen for another 5 years or so. Both have gone through a death and will share the same rebirth. I'm not saying that Detroit will be on par with San Diego but San Diego did go through a significant and similar death that Detroit has experienced when the Navy Ship yard??? I believe closed. Many of the same comments that are being said about Detroit now were being said about San Diego. Just like other cities that have seen a death and rebirth, Detroit will see and is seeing it's rebirth. It starts in the City Center downtown and spreads out from there. If you've been downtown Detroit lately, you can't deny that there is a significant rebirth in Downtown Detroit.
Jared Pomranky
Urban Detroit Wholesalers, LLC
www.WholesaleMi.com