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Home-sellers in West Coast cities are getting the highest return on their investment in the nation, according to Zillow.com. However, San Diego lags the other big cities on the West Coast.

Oakland is first, for a gain of 78 percent on a home held 7 years and 3 months; second is Portland, 64.7 percent (9 years, 1 month); followed by San Jose, 56.5 percent (9 years, 8 months).

Los Angeles is at 53.7 percent (9 years, 8 months) and Seattle next at 53.1 percent (9 years 2 months). And San Diego? Down the line at 33.3 percent (8 years, 11 months).

The overall gain for the U.S. is 24.1 percent over 7 years and 5 months.

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Comments

Visduh Sept. 7, 2017 @ 5:56 p.m.

Oakland? Really? That must be spillover from the Peninsula, Silicon Valley, San Francisco and the other booming corners of the Bay area. And it's not so hard to understand, in that just a few years back housing values there were not matching the rest of the area. That spillover is a signal that the wild run-up in values is near a peak. And it should be.

As to San Diego, it lacks the white hot job markets of the Bay area, the pay levels can only support about so much housing outlay, and the city is not exactly the paragon of virtue as far as quality of life is concerned.

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Don Bauder Sept. 7, 2017 @ 8:13 p.m.

Visduh: Yes, Oakland surprised me, too. It may mean that prices were very depressed at the bottom and have picked up to unrealistic levels in the boom (or bubble). San Jose (basically Silicon Valley) went from very high prices to extremely high prices and the gain was still above 56 percent. San Francisco is not in the numbers Zillow.com presented. Best, Don Bauder

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Ponzi Sept. 7, 2017 @ 9:15 p.m.

My mother bought her home in Lemon Grove in 1971 for $20,000 and it is estimated to be worth $480,000 today. Her brother, my Uncle bought his family home in a suburb of Erie, Pennsylvania in 1958 for $6,000 and he just sold it for $72,000. So in 60 years his gain was $66, 000 and my mother’s gain was $460,000 for 46 years is $460,000.

When I worked for The Price Company in 1994, I moved to Seattle during the merger of Costco and Price Club. I bought a home in Woodinville, Washington for $225,000. It was on the “Eastside” which is on the eastside of Lake Washington from Seattle, across the floating bridges. At one time it was very rural and I ran into hostilities about being from California and “ruining Seattle.” “You darned Californicator!”

The major suburbs of the “eastside” where Redmond, (Microsoft), Kirkland (where Costco once was headquartered and got the Kirkland Signature’s name) and Issaquah (where Costco is headquartered). Bill Gates lives in Medina which is between Bellevue and Kirkland. When Real Networks, Adobe, Amazon and other tech firms grew, so did the local real estate. I sold the $225,000 home five-years later for $900,000.

Now, I am perplexed because San Diego is not a tech center or major corporate center. Although Boeing moved its headquarters to Chicago, and presently Amazon is putting out feelers for subsidies to establish a new headquarters in a major city, what does San Diego have?

Seattle has Microsoft, Costco, Starbucks, Nordstrom’s, Amazon, Eddie Bauer, Textron-Genie, Boeing, Paccar (trucks), Safeco, Weyerhaeuser, International Paper, a true International Airport, Unisea (Japan seafood that owns Dutch Harbor Island in Alaska), Alaska Airlines, Fred Meyer (the largest local grocer chain), and more.

San Diego has Qualcomm (which is embattled now in patent troll disputes) and Sempra Energy. How does San Diego real estate continue to climb? Chinese investors (let’s not forget the Japanese investor collapse that devastated Hawaii real estate for a decade) and other foreign investors.

San Diego real estate is being propped up by those willing to pay the sun tax, foreign investors from Mexico and Asia, and the AirBNB phenomenon.

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jnojr Sept. 12, 2017 @ 4:33 p.m.

What does San Diego have? Weather. And it isn't LA.

I only hope the fools don't run out of money before it's time for us to cash out and buy a really nice house somewhere else with no mortgage.

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Don Bauder Sept. 13, 2017 @ 1:37 a.m.

jnojr: San Diego has lots of interesting things to do in that excellent weather -- lots of golf courses, long beaches, etc. Unfortunately, some of the beaches and parks are not maintained well.

The number of activities San Diegans can enjoy year-around is one reason people aren't so interested in professional athletics. Attending those games is expensive. There is too much else to do, much of it free. Best, Don Bauder

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Don Bauder Sept. 13, 2017 @ 1:40 p.m.

jnojr: Actually, in Silicon Valley home buyers are purchasing residences with cash, even when the cost is in the several millions. Best, Don Bauder

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Ponzi Sept. 7, 2017 @ 9:43 p.m.

Okay, in all fairness I kept the best for last. That Woodinville home was at that time, “considered rural.” And I liked it because I could drive down East Lake Sammamish Road to Issaquah in 15 minutes. Never did I realize the eastside would become a haven for high tech employees. Like San Jose, Cupertino and other Bay Area locales, the tech industry brings in money and drives real estate values up.

I bought a 1600 sq. ft. home and remodeled it to 2600 sq. ft. Added a large greenhouse to raise veggies year-round and poured concrete for an outdoor regulation sized basketball court. The improvements cost about $200,000. So, only because the home was remodeled was I able capture such a gain. One funny thing was that when I bought it for north of $200K, I was contacted by a firm that cut down soft pines and paid for them. So, on my two-acres, I had them cut about $100,000 worth of trees. They hauled off several dozen. So the cost of the home was $225,000 – 100,000 in natural resource removal, the net cost of the home was $125,000

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Don Bauder Sept. 7, 2017 @ 9:57 p.m.

Ponzi: San Diego is one of the nation's three biotech centers. In biotech, money can be piled up, even if a product doesn't succeed. Scratch a biotech IPO, and you will find that the founders got stock for around a penny, maybe a few pennies, and the second level investors may have paid 50 cents per share. The company goes public. There are rules for how much stock the insiders can dump, but they can make a much higher percentage gain on their stock -- even if the company goes nowhere -- than they will make selling their home. Best, Don Bauder

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Ponzi Sept. 7, 2017 @ 10:15 p.m.

Biotech is hot. Just look at Newlink Genectics Corporation today. It shot p to day 75% on rumors (or news...).

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Don Bauder Sept. 8, 2017 @ 7:38 a.m.

Ponzi3: For the outside investor, biotechs are a gamble. Not many get approval of a drug by the FDA. However, many insiders make big bucks whether or not the company flourishes because they got their stock so cheap. Outsiders don't get those cheap shares. Best, Don Bauder

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Don Bauder Sept. 8, 2017 @ 7:35 a.m.

Ponzi2: Buying in a so-called "rural" area that is likely to become urban is a very smart road to real estate riches -- sometimes, as in your case, but not always. Best, Don Bauder

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AlexClarke Sept. 8, 2017 @ 6:42 a.m.

Real estate is cyclical just like business. There have been many real estate ups and downs. Those in the real estate industry will talk like there is no end to the upward climb of prices. While some communities are virtually immune from the natural cycle the majority of bedroom communities are not. I notice that several homes in my neighborhood are staying on the market longer. There is one down the street that was a "flipper" and the price is at the very top of the market and it is just sitting there. I believe that we are again at the top of the market and there is an adjustment coming. No real experience just been-there-done-that.

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Don Bauder Sept. 8, 2017 @ 7:43 a.m.

AlexClarke: Yes, real estate has its ups and downs. Look at San Diego, and virtually every other U.S. metro area, in the Great Recession of late 2007-early 2009. Real estate values were plummeting 50 percent in some markets and dropping significantly in just about every market. Best, Don Bauder

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Founder Sept. 8, 2017 @ 5:51 p.m.

I think SD Real Estate will likely DOUBLE within 5 years because SD is still a Safe & Cool place to live as compared to other parts of the US where people are starting to get scared on multiple levels by what is happening in our country!

  1. Your listed prices above show that SD is the hot deal for all those that want to enjoy safe, sunny and cool living.

  2. Notice that there is almost nothing for sale in SD, which means that Developers are keeping everything to either rent or lease because the market is so hot! Expect rents to increase 5% yearly if not more as existing units get remodeled (and their rents double).

BTW Biotech tends to locate where the weather is almost perfect due to the HVAC requirements for all their labs.

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Don Bauder Sept. 8, 2017 @ 7:22 p.m.

Founder: I agree that San Diego is a great place to be if you want to be on the West Coast. The weather is excellent all year long.

I have to argue with you on one point. You say that biotechs tend to locate where the weather is almost perfect. San Diego is one of three biotech centers. One of the three is Boston. The weather is not perfect there. Best, Don Bauder

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MURPHYJUNK Sept. 9, 2017 @ 8:02 a.m.

wil we be seeing a surge in refugees from Texas and Florida soon ?

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Don Bauder Sept. 13, 2017 @ 1:39 a.m.

jnojr: Not a surge. Real estate prices are too high. Best, Don Bauder

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Don Bauder Sept. 9, 2017 @ 1:15 p.m.

Murphyjunk: Surge of refugees from Texas and Florida? That is a good question. Surely there will be some, but I don't see a surge in the hurricane sense. But there is another hurricane lined up behind Irma. Generally, coastal California metro areas are a lot more expensive than Houston and Florida. Best, Don Bauder

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Ponzi Sept. 9, 2017 @ 8:04 p.m.

Agreed. Any transplants will have to have the cash to pay for the expensive real estate here. They may not even get money for their losses if they did not have flood insurance.

When I was an IT manager for a casualty insurance company in San Diego, they expanded to Florida to insure mobile homes. I wonder if they are going to struggle or go belly up with these recent events. A lot of people don't realize you have to have a separate insurance policy for flooding. Insurance will pay for the roof being blown off, but flooding is not covered unless you have a separate "flood policy." Just like in California you have to carry a supplement policy for earthquakes.

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Don Bauder Sept. 10, 2017 @ 8:08 a.m.

Ponzi: That casualty insurance company that expanded into Florida to insure mobile homes could have serious problems if it is still in the business, although it might have gotten out of the business, or might have some wrinkle in those policies that I don't know about. Commentators on Irma keep saying that mobile homes are extremely vulnerable. Best, Don Bauder

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Ponzi Sept. 12, 2017 @ 6:29 p.m.

Don, when I worked for them I visited Gainesville several times to set up their IT infrastructure. I did not like the flat land or the sinkholes. At the time, there was a hurricane hiatus and the littler players, like my employer, moved in. Ironically, after my comment a read a story in the Wall Street Journal that quoted one of the executives from my former employer.

WSJ: https://www.wsj.com/articles/why-florida-is-largely-insured-by-companies-youve-never-heard-of-1504782003

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Don Bauder Sept. 13, 2017 @ 1:41 a.m.

Ponzi: Much of Florida was built on flood plains. Most locations in Florida are not very high from sea level. Risks abound. Best, Don Bauder

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