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As the housing bubble inflated amazingly earlier in the decade, only 7% of San Diego households could afford to buy a median priced home, says Kelly Cunningham, economist for the National University System Institute for Policy Research. Now that the bubble has burst, 51% of households can buy a median-priced home. However, San Diego is still the 12th least affordable housing market. The New York City area is the least affordable at 22.6% and San Francisco is second most expensive at 28. San Diego home prices are back to where they were in 2003, and adjusted for inflation, are back to 1999 levels, says Cunningham. If the current trend continues, "home prices are likely to stay below former peaks for another 8 to 10 years," says Cunningham. "Adjusted for inflation, prices may never reach previous highs without an unprecedented and unexpected rise of area household incomes." Cunningham's new San Diego Economic Ledger has just been published by the institute.

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Comments

Visduh Dec. 22, 2010 @ 11:26 a.m.

This is actually good news for the local economy. The vast majority of the population should never be frozen out of home ownership. Now let's listen to the howls of those who overpaid in the recent real estate insanity, and who are upside-down on their home loans! The crazy cost of home ownership drove many productive and educated workers out of the county for a time. Maybe they will now be persuaded to return. One the whole, even though some will continue to suffer from having overpaid for homes, this is excellent news, and the comment that the prices will stay low for 8 to 10 years is a welcome one.

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a2zresource Dec. 22, 2010 @ 11:41 a.m.

Let's hope that there will be something other than low-wage service jobs to attract them back in the first place!

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Founder Dec. 22, 2010 @ 1:50 p.m.

Weather, Surf and Location are all that is left...

San Diego will become like another Hawaiian Island, a very expensive place to live and visit...

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Don Bauder Dec. 22, 2010 @ 4:01 p.m.

San Diego already has one of the nation's highest cost of living. Best, Don Bauder

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SurfPuppy619 Dec. 22, 2010 @ 6:48 p.m.

Let's hope that there will be something other than low-wage service jobs to attract them back in the first place!

================= We used to have those high paying manufacturing jobs right here in San Diego.

General Dynamics had a HUGE campus in Kearny mesa that had tons of jobs.

The Tomahawk Cruise Missle was MADE right here in San Diego 20 years ago. Those missles cost $200K EACH!

Those jobs are gone. They went bye bye, and we get maid and hotel front counter jobs in their place.

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Don Bauder Dec. 22, 2010 @ 8:13 p.m.

Half a century ago, around 27% of SD jobs were in manufacturing. Now it's around 8%. Best, Don Bauder

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Don Bauder Dec. 22, 2010 @ 3:59 p.m.

Oh yes. Affordability is good news. Of course, San Diego is still among the least affordable cities. Best, Don Bauder

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Founder Dec. 22, 2010 @ 1:48 p.m.

It will be continuing loss of Quality of Life benefits that will doom San Diego's housing market as our Leaders try to leech money from the General Fund to pay into the Pension fund to support their future HUGE Pensions!

San Diego will now start increasing the:

--> Number of fees it charges along with rate increases from SDG&E and the MWD; all of which will make living here less of a great place than it was just 5 or 10 years ago.

--> Density of our Urban core, creating linear ghetto's to promote low cost housing there instead of all around San Diego! Example: Liberty Station No Low Mod Housing built despite being a ReDev. Project Area!

--> The number of parking tickets issued due to the reduction of on street parking.

--> The number of City Services NOT BEING provided due to Big Project Costs.

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Founder Dec. 22, 2010 @ 3:30 p.m.

I forgot to mention that while SD's housing prices may in the future return to their previous high level, it will most likely be due to inflation or even the devaluation of the Dollar and not buyer demand!

I would not be surprised to see the US Gov't. issue New Dollars that are worth a fraction of "old" dollars like Mexico did when the New Peso was worth 10 of the old Peso's... I've been watching the Peso and it is going up in value compared to the dollar while the Canadian Dollar and the Euro have stayed the same!

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Don Bauder Dec. 22, 2010 @ 4:05 p.m.

If housing prices return to the bubble levels, it will be in the distant future. And your fears are justified: we are deliberately driving down the dollar with excessively easy money. In the past, that has led to inflation. It doesn't look on the horizon now, but it usually comes fast. Best, Don Bauder

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Don Bauder Dec. 22, 2010 @ 4:03 p.m.

The most deleterious is the number of services not being provided -- along with the lack of infrastructure improvement, maintenance, etc. Best, Don Bauder

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Visduh Dec. 23, 2010 @ 8:39 a.m.

Founder, you may be right about the eventual need to replace the dollar with a new dollar that is denominated at ten of the current ones. Your memory of what happened in Mexico about twenty years ago is a bit off. They didn't come up with a new peso that was worth ten of the old ones. It wasn't even worth one hundred of the old ones. No, the peso had fallen so far that it took thousands of them to get one dollar. So, when they redid the currency there, they moved the decimal point THREE places, and one new peso replaced one thousand of the old ones. Scary, huh? Couldn't happen to us? Don't bet on that. In some ways it already has. A century ago it is claimed by some historians that the dollar bought about one hundred times what it buys today. So, we've had our share of inflation, but it has been gradual enough that we deal with it.

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Don Bauder Dec. 23, 2010 @ 12:16 p.m.

I well remember the days when San Diegans had money in Mexican banks and were getting fat interest rates, and bragging about it. Then came a devaluation, and suddenly there wasn't nearly as much in the account as there had been. Best, Don Bauder

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Founder Dec. 23, 2010 @ 12:36 p.m.

Thanks for the memory check up!

I guess I got the 10 for 1 confused with 1000 for 1!

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Don Bauder Dec. 23, 2010 @ 3:17 p.m.

Governments do that all the time. Best, Don Bauder

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Don Bauder Dec. 23, 2010 @ 8:45 p.m.

Government statisticians move decimal points in two directions. To the left for inflation and unemployment stats, to the right for personal income numbers. That statement is hyperbole, of course, but you catch what I mean. Best, Don Bauder

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Founder Dec. 24, 2010 @ 9:19 a.m.

I never like Fudge, but it seems our Leadership is addicted to it!

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Don Bauder Dec. 24, 2010 @ 12:21 p.m.

Yes, our governments are addicted to fudge. They don't even get sick of it during the Christmas holidays, when everybody else gets sated with the stuff. Best, Don Bauder

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