While a big outperformance of national prices would feel good, a national boom is more sustainable and lets our prices grow without hurting our competitiveness.
Longer term, I think Prop 13 and the lack of developable land make SD a better investment than places like Dallas and St George. At some point construction parts and labor will get more reasonable and housing prices there will decline to marginal cost + a fairly small location premium.[/quote]
I agree with you that the lack of developable land in San Diego raises prices and rents. Add to that the influx of people from the even worse-run cities in the Bay area and LA, and San Diego prices and rent will benefit. But San Diego is tied to CA, which competes for worst-run state with the likes of New York, Illinois, New Jersey, etc. For years, CA ranks as most business-unfriendly, highest percentage of people in poverty (despite lavish welfare programs), and is tied with NY for highest taxes. Example: We have, by far, the highest gas tax and are tied with Rhode Island for worst roads in the US.
So as the new exodus from CA (Census Bureau) continues, San Diego will always have its ocean, mountains, and weather to benefit real estate investors. But these benefits could be outweighed by other factors. People can vote with their feet.
