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2019 San Diego Real Estate Market Update v2

 

Our 2019 San Diego real estate market update shows a vibrant community with real estate prices rising at a slower pace.

Better yet, the San Diego real estate market offers buyers lots of lifestyle options.

San Diego is the second largest city in California. Plus, it continues to grow in population. While not as popular as Los Angeles and San Francisco with hotter real estate markets, San Diego has a lot to offer.

As you will read below, experts disagree whether San Diego currently experiences a buyer’s or a seller’s market.

 

San Diego Real Estate Market Shifts in Favor of Buyers in 2019

 

According to ABC 10 News San Diego, in 2019 San Diego’s real estate market shifted into a buyer’s market. 

Their news story points out that:

  • According to Trulia, most of the West Coast experiencing an affordable ceiling;
  • Which means that San Diego’s home prices are falling; and
  • Listings in 2019 selling at 4% below the original asking price.

 

Other Experts Report San Diego Market Slight Increase in 2019

 

Earlier this year, Forbes reported that “San Diego Home Prices Increase Less Than Inflation”. Here  They provide a chart showing that in 2017 San Diego average home prices increased by 7.4%. Yet, the price increase was only 1.3% in 2018. This resulted in a downturn of -6.1% during those time periods.

But, in relation to inflation, price increases in San Diego of 1.3% was less than the 1.6% inflation increase.

According to Zillow, San Diego’s current median home values of $634,800 increased by 1.9% from the previous year.

According to Redfin, the current San Diego average home price of $633,000 increased by 2.1% from the previous year.

 

San Diego Real Estate Market Forecast for 2020

 

Zillow predicts an increase of 1% in 2020. Zillow expects a shortage of home supply which increases the demand for San Diego housing in 2020.

Redfin also predicts a price increase in 2020.

Affordability is the main issue in 2019. From 1998 to 2018, San Diego median home values rose by 217%. During the same period, median household income only rose by 77%. The state of the local and national economy will affect the 2020 prices.

 

San Diego Home Prices Appreciation Rates

 

The Neighborhood Scout’s site publishes data about the San Diego real estate market. Over the past 10 years, San Diego’s real estate appreciated by 55.3%. That put San Diego’s real estate appreciation in the top 10% in the country.

Also, San Diego’s real estate appreciation over the past year of 8.3% ranks among the nation’s highest appreciation rates.

 

The Best San Diego Neighborhoods for Real Estate Investing

 

San Diego has 102 neighborhoods. Coronado is the most expensive neighborhood with a median home price of $1.8 million. On the other hand, Otay Mesa West is the most affordable neighborhood with a median home price of $438,000.

The Neighborhood Scout site lists the following San Diego neighborhoods with the highest appreciation rates:

  • Palm Ave. / Alameda Blvd.
  • 10th Ave. / Broadway
  • E. Hawthorn St. / 1st Ave.
  • Presidents Way / Park Blvd.
  • Henderson Ave. / Guadalcanal Ave.
  • Harbor Island Drive
  • Upas St. / 32nd St.
  • Boundary St. / Haller St.
  • Highland Ave. / E. Division St.
  • Market St. / 28th St.

 

Benefits of San Diego Real Estate Investments

 

San Diego’s real estate market stands out for these reasons:

 

San Diego’s Housing Market a Relative Bargain   

 

In spite of California’s reputation for expensive real estate prices, San Diego boasts relatively affordable home prices.

The median home price of $633,900 (combined median prices reported by Redfin and Zillow above) looks bad when compared to the $300,000 national average. But, it’s a bargain in California. One San Francisco home costs more than several San Diego homes.

 

2019 San Diego Home Prices Lowest in Years

 

Some experts claim the San Diego housing market cooled in 2019. In some areas, home prices fell because of decreasing demand. As pointed out above, home price appreciation slowed.

These indicators make San Diego a great place to invest in 2019.

 

New Housing Inventory Slow Coming to Market

 

San Diego housing construction stalled in 2019. Especially for single family residential construction.

Faster growth of multi-family housing in San Diego than single family residences.

 

Good Rental Rates in San Diego

 

San Diego’s median rental is $2,700. Yet, single-family home rentals in San Diego are much higher. A nice single family home rents for at least $3,000.

 

San Diego Landlord Friendly

 

Investors prefer San Diego over Los Angeles and San Francisco because San Diego has no rent control. Many community groups fight rent control proposals in San Diego.

 

Lots of Renters in San Diego

 

Although San Diego’s real estate market prices rank below other West Coast cities, it’s still amongst the most expensive in the country.

This creates a greater demand for rental properties in San Diego. Affordability issues drive people in San Diego to rent rather than buy.

 

Short Term Rentals Thrive in San Diego

 

San Diego’s many tourist attractions (San Diego Zoo, SeaWorld, Desert Garden, Balboa Park, golf resorts, museums, warm weather, and beaches) brings many visitors to the area.

Rental properties within easy reach to any of these attractions thrive.

 

San Diego Home to Many Military Bases

 

The defense industry and the military provide a stronger economy for San Diego than tourism. Tens of thousands of renters expecting deployment elsewhere in two or three years. Plus, the military provides generous rental allowances to its service members.

Rentals near San Diego military bases also thrive.

 

San Diego Students Rent Too

 

As a major metropolitan area, San Diego hosts many colleges and universities. For instance, the University of California in San Diego is very large. Also, San Diego State University provides many student renters. The University of San Diego and National University in La Jolla along with Nazarene University in Point Loma also generate many student renters.

San Diego also hosts many smaller universities, colleges, and institutes with students renting too.

 

San Diego Housing Supply Constraints

 

Unlike Los Angeles with vast land to expand, San Diego’s geographic constraints limits growth. As a coastal city, no one builds on water.  Inland expansion limited by the Cowles Mountains.

High-density construction limited by local regulations. Also, wilderness areas prevent construction like the Cleveland National Forest and the Cuyamaca Rancho State Park.        

All these contribute to a constrained housing supply.

 

Conclusion

 

This 2019 San Diego real estate market update demonstrates how experts differ.

It’s a buyer’s market in 2019 according to Trulia. Forbes claims only a small home price increase in 2019. But, Redfin and Zillow report an upswing from 2018 prices making it a seller’s market.

Yet, all forecasts predict a vibrant San Diego real estate market in 2020.

Real estate investors find San Diego ideal because of:

  • The warm weather;
  • Beaches;
  • Tourist attractions;
  • Large college student population;
  • Many military bases;
  • Housing supply constraints;
  • Slow housing upcoming inventory; and
  • No rent control.

 

Real Estate Agents Making Money in San Diego

 

Join Us in San Diego. We offer transparent 100% Commission Plans. Also, the following benefits for all our Realtors:

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·         Broker/Attorney Support;

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Steven Rich, MBA – Guest Blogger

 

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