Other low-income areas are having troubles. In the 92027 zip code in Escondido, the median price of homes has dropped from $500,000 to $350,000 in the last two years. Median incomes are a subpar $66,284. Of homes on the market, 72 percent are short sales or foreclosures. The Encanto area has incomes that are lower still: $63,865. Home prices are down 38.6 percent over the last year. Of Encanto homes for sale, 75 percent are short sales or foreclosures.
By contrast, Del Mar, with its median income of $113,407, has few homes in distress. Just 5 percent of homes on the market there are short sales or foreclosures — about the same as tony Rancho Santa Fe.
The interest rates on many San Diegans’ mortgages will be reset in the next few years. So how long will the crisis last? Levine thinks it is close to bottoming now; the Federal Reserve will have to raise interest rates to defend the dollar, he believes, and buyers will come in, fearful that interest rates will go further upward. Louie Duarte of County Properties thinks it will last “three years at the max, more likely a year to two years.” Joshua Sloan of Keller Williams Realty in Escondido says the problems will go on for “the next year or even two.” Says Yui: “another 12 months.” It will be painful for those families losing their homes but a gift to San Diegans who can finally afford to buy one.