San Diego has had something of a mixed history when it comes to real estate. Before the crash, affordability was the main issue. With real estate prices across the city rising all the time. Long-time residents were having trouble affording new homes.
According to realtor data, the average property values went up 300% between the late 1990s and when the crash happened in 2007. While properties are still more expensive in the city than almost anywhere else in the area, prices have fallen an average of 36% since that time.
More recently, short sales have increased throughout San Diego, putting more inventory on the market. Depending on the volumes we can expect, this may deflate the property prices somewhat before the market catches up. For those wanting to move to the city to work that’s good news, for those wanting to sell, not so much.
The main employers in San Diego are government and education, with healthcare coming third. That meant that residents were somewhat insulated from the worst of the economic crisis. We still felt the pain and are still feeling it, but nowhere near as much as other cities in the country. The location also ensures the tourist dollar still has an impact on the city economy.
Residential Real Estate
The real estate picture in San Diego is a real mixed lot. While median prices are increasing, the type of property on the market has seen a subtle shift. The main single property type is still distressed homes, making over just over 42% of sales in 2012. That’s down from the highest in February 2008.
Homes valued at over $500,000 made up 22.5% of all homes sold in California in September 2012. The median property price at the moment sits around $355,000, which is up 12.7% over this time last year.
Commercial Real Estate
The commercial real estate market in San Diego isn’t faring so well. Office space has seen a drop of 5.8% in value over the year, with the average price currently standing at around $222.34 per square foot.
Industrial property also dipped, with the average price for industrial space sitting at $126.87 per square foot. That’s down 6.2% over September 2011. The asking price for retail properties rose to $207.36 per square foot, which is up 1.6% over last year. While that drop isn’t so much, it contributes to an overall fall of 19% over the 2012 period so far.
While the real estate market is faring better here than many other cities, it is still being affected by the general malaise in the economy. Those with access to cash or credit will find now an excellent time to buy residential property, or buy or rent commercial. Prices are low, inventory is high and there are definitely deals to be done.
Headed to California? Take a peek at our furnished housing in that area!