As with most of the rest of the state, San Diego suffered a lot of pain through the last real estate crisis. Property prices in the San Diego area, in fact, had inflated well above the gains realized across much of the rest of California, making the ensuing deflation that much more difficult. Since then, however, an improving economy and the enduring appeal of San Diego as a city have contributed to an impressive recovery. On the residential front, San Diego real estate transactions are once again setting new records, even while the pace and nature of commerce remain far better grounded than through the last bubble.
A look at the San Diego homes for sale at the present time will reveal, however, that some sellers have become somewhat overly optimistic. Sales prices in the San Diego area have settled in at a bit above twice the national average, a level that seems entirely justifiable given the facts on the ground. On the other hand, initial listing prices have climbed significantly farther above the nationwide norms, suggesting that some sellers are fishing for returns that are not likely to materialize in the near future.
Another important consideration regarding San Diego real estate is the way that development activity has been slower to pick up than many assumed would be the case. Normally, steadily rising residential real estate pricing encourages developers to get back into the mix, even among those who have become more conservative since the last boom. With some developers having disappeared over the course of the last recovery, though, and others apparently still licking their wounds, a return to a healthy rate of building activity is still on the horizon.
Of the recovery of this kind that has so far been in evidence, much of the ambition has focused on the multi-family side of things. With home prices already high enough that a fair number of families will be priced out of buying, some developers seem to be calculating that a permanently heightened level of renting will be part of the area’s future.
On the other hand, there are signs that single-family new development is finally picking back up to a higher level, as well. With demand for San Diego vacation rentals already at an all-time high, even those homes that never end up with an owner as a permanent resident could very well pay off for buyers. Particularly insofar as a variety of Internet-based services now make it easy to turn any property to such purposes, buyers might increasingly look to such options as a way of paying off their investments.