[quote=bearishgurl]I want to close this side discussion by asking, “Do people really want to attempt to raise young families in sub-1000 sf home with stairs and little to no yard?” Is that really what today’s homebuyers will “settle” for?

I think not. It’s unimaginable to me … especially with kids.[/quote]

Yep, that’s exactly the right statement. Unimaginable to you!
Plenty of people around the world live in less space – NYC, Hong Kong, Tokyo, etc. The reality is that San Diego housing is fairly cheap compared to other major cities and with the quality of life here, SD will continue to attract people to move here – as long as jobs are available.
So yeah, SD will likely not have too many new SFR with large lots built in the future. But there will be new homes built and people will buy them.