Is San Diego real estate becoming unaffordable too fast or is the Southern California property market just getting warmed up?
Debates continue to rage on as to whether or not San Diego real estate is unaffordable. It is no secret that prices in this region have soared. Some are concerned about the recent increases while others welcome them. So is it getting too hot? Can anyone still afford to live here? More importantly, what’s the outlook for real estate investing in San Diego?
Pricey San Diego Property in the Headlines
San Diego, California has some of the best and most in demand real estate in the world. Often times, that can translate to a price tag worthy of the reputation. However, it’s always smart to look beyond the headlines to find out what’s really going on.
U-T San Diego recently ran a feature article quoting data from an Income.com survey which dubbed the county as ‘the second least affordable housing market.’ However, looking at the data used and the latest statistics from the National Association of Realtors, San Diego’s median income was $60,330. For comparison, San Francisco’s median income is around $74,922. Yet, in San Diego, the median resale price for a single family home was only $469,000 versus $706,300 in San Francisco. By any measure, that makes San Diego far more affordable.
The Uniqueness of the San Diego Housing Market
In addition to having more affordable commercial real estate, which is also attracting more businesses, San Diego is attracting residential buyers from around the globe.
Many are looking for second homes, passive income and some just want wealth preservation. They can afford it and aren’t concerned about the prices at all. Being on the front end of a new real estate boom, which should continue to boost local home prices for another ten to fifteen years, many will benefit from large capital gains over time.
Of course, this can sometimes cause a disconnect for local residents and workers in some neighborhoods. Many overlook how diverse the San Diego County housing market is, both in terms of geography and price. With so many businesses and workers in the U.S. now completely location independent, there are plenty of options for snagging a great home in a good location that won’t break the bank. In fact, many remote workers, freelancers and self-employed business owners should be able to find far more affordable housing options just inland from the coast.
There will always be some pessimists, but looking back, people will realize this was one of the best times to buy homes in San Diego. No one can guarantee that there won’t be future fluctuations over the next few decades. However, that doesn’t matter as long as you are watching for them. Those investing for long term hold, flipping luxury houses or their own residences don’t have much to fret about.
