Trends which may moderate housing price growth:
1. gradual increase in interest rates, 10 year at 2.386%
2. Chinese funds have cooled off, at least for now and usually the Chinese govt waits a few years to reverse policy
3. less immigration to US (legal and otherwise) under DT
4. rents flat or declining in some major US markets like San Fran, Silicon Valley,
5. High end sales flat in places like New York
6. signs that not every millennial wants to have 3 roommates to live in San Fran to afford the $4K/month rent for a 1BR
7. low inflation helps offset some of problem of low wage growth
8. the endless debate about repeal or replace ACA/Obamacare causes some to put of making long term financial decisions (greater uncertainty)
9. everyone wants to buy a Model 3 now as that’s a more fun way to spend money
10. days like today are too hot to look for housing (seasonal effect is actually quite pronounced in SD)
11. SD has been “discovered” already and everyone who wanted to buy has 🙂
Please chime in if you think this thought process is off base.[/quote]
1. Interest rates remain at historic lows. Even 5% is low.
2. I do not think the Chinese were ever a large part of the San Diego market – more OC?
3. Immigration will continue, and I have no doubt that population growth in San Diego will continue, Whether from abroad or from other parts of the USA.
4. Rents in SF are insane and make San Diego rents look cheap. Rent will rise until fewer people look for houses.
5. High-end sales seem to be flat everywhere – I see loads of places for sale in La Jolla. I am never sure who is buying 1.5 million+ houses?
6. When millennials start having kids, that is when they look for SFHs. My feeling is that people are delaying having a family.
7. IMO inflation is not low, we just do not count inflation properly. Wage growth is also high for high-income people, we also do not count wage growth properly, an average is pointless.
8. People buying houses are not worried about healthcare. They are middle-aged and mostly get insurance through a job.
9. People do not want a model 3 when having a family.
10. Dunno about weather effects.
11. 🙂
Bonus point: Trump is putting more money into military, which always helps San Diego.
