Investing in the San Diego Housing Market

The San Diego real estate market continues to be at the forefront of the California real estate industry. Local real estate prices are almost three times that of California's average, and pent up demand created by the economic pandemic created by recession has stimulated significant activity. Homebuyers have been fighting for prime, sought-after real estate over the last three years. This is especially true of beach communities like La Jolla and Encinitas, which have seen home values increase at an astounding forty percent in just five years. San Diego is one of California's most popular destinations for tourists, so the housing market is no doubt a buyers' market. In fact, there have been so many sales over the past year and a half that new homes are actually exceeding the level of new construction.

There is no question that the San Diego housing market has had its ups and downs over the past year and a half. In January, the city experienced one of its worst hurricanes in over 100 years, which prompted record high rainfall numbers and flooding concerns. Over the next month, the city experienced even more rain, this time measured at three times the normal level. These high levels of precipitation combined with record rainfall caused the existing inventory levels of single-family homes in San Diego to exceed the number that could be handled by that much supply. Sales over the past year and a half have totaled six million dollars, far surpassing expectations.

San Diego's real estate market has been hurt by low energy prices, but it is far from dead. The state of the real estate market in California is in fact one of the stronger markets in the nation, especially considering the state's strong economy and recent build up of non-residential construction. In San Diego, the existing inventory level of single-family homes is well below the rate of growth of about two percent expected for this year and the past few years, which bodes well for those looking to buy and sell residential property in San Diego.

On the flip side, California's booming real estate industry - which includes the fast-growing Silicon Valley - will see demand slow down or even moderate as the nation braces for the upcoming holiday shopping season. One of the reasons for that slower demand is the higher costs associated with air travel this year as students return back to school. The higher cost of gas for an individual student is making it that much harder for a family of four to drive down to college and purchase their new home. Another factor affecting the California home market is the recent increase in the number of people applying for and receiving deferments on their federal student loans. The number of deferments that have occurred over the past several years has lead many colleges and universities to increase their application's requirements for student loans, further lowering the demand for residential property in California. Even though most students are returning to school, there is still a high demand for housing that can accommodate students who are still living at home with their parents. Read more here about the top San Diego home prices.

The slowdown in San Diego's housing market is hitting all demographics, but those who are more vulnerable to the housing bubble that is starting to deflate will be hit the hardest. One of the main reasons that California home owners are now having to take a harder look at their finances is the glut of new construction on the market. Developers are starting to back away from new home construction because the new construction homes are not priced in the same manner as older homes on the market. Because of this, existing homes on the market are starting to see a higher demand than ever before, which makes them some of the best deals around. The average home price in the San Diego housing market right now is $393,000, so you might want to take a long look at those homes that are sitting on the market waiting for a buyer. Here is an alternative post for more info on the topic: https://en.wikipedia.org/wiki/Real_estate_investing.