Thanks for your response. I have a different perspective. The last Census Bureau showed over 44,000 San Diegans moved out i the year ending June 30, 2006.
Most employment in the last few years was in construction, real estate, and lending, and in retail and restaurants as people took our the home equity of ever rising home prices to go on shopping sprees. As housing cools, tehse industries that have been our major growth, will keep weakening. Our manufacturing sector is shrinking. Nokia is now thinking of leaving. Before that it was the Sony plant in RB, Buck Knives in El Cajon…
The 44,000 people per year leaving has left many vacancies for doctors, police officers, engineers, cashiers. I keep seeing Hiring signs at so many stores. I read that high housing prices are making it harder for SD to recruit surgeons! The outlook for the San Diego job market is bleak. My hope is that biotech will some day take off again. Our biotech companies are small, and my friend who is a manager at one of them, is concerned for her job prospects and is interviewing in the other big biotech cities.
Rental prices are based on income, and cannot be artifically boosted by funny money. I saw a news story this morning: a mother said her grown children live with her, because rents are so high, and forget about saving for a down payment on a house. The story said you need an income of $40K to afford a median 2 bedroom home, which is about the median wage of San Diego. Only 5 other US cities have higher rents than San Diego, and the ones I remember are Boston, New York, San Francisco, San Jose.
Landlords can ask for the moon, but rents which exceed a person’s ability to pay, will be vacant. San Diegans will move in with their parents or leave the area before they pay higher rents.
The same news story interviewed the young man from UCAN, Michael Shames. He said that San Diego has the same wages as other big cities, but a much higher cost of living in gas and housing. This is known to San Diegans as the sunshine tax. He said San Diegans are well aware of this tax, and people moving here find out about it the hard way.
If I owned rental property, I would cash out now. I think the correction will be huge, rental pricing cannot go up, and it will be another 50 years before we see interest rates below 6%.
