Maybe it’s not a big percentage, but wireless industry is strong in SD because Qualcomm is here and it’s doing well, and I heard that they pay very well. There are many many small biotechs in San Diego, and scientists there get paid quite well too. Still, in aggregate, SD doesn’t have a high wage level.
Regarding why people don’t see that a big price correction is coming — by definition, bubble exists when a majority of people believes that the existing price trend will continue. It appeals to human’s basic biases, and it comforts them in believing so. On the other hand, if there is no price correction later on, then people still stop calling it “bubble”. To me currently housing is borderline on being stable – anything go slightly wrong may tip the balance. Could be ARM reset, could be foreigners want to get out of dollar and dispose of dollar based mortgage based asset and drive up lending cost further… the problem is that once the process starts, it can easily escalates because of debt level, use of ARM and interest only mortgages, and real-estate dependent consumer spending and job creation.
The problem is that the tools that were available in the past to stimulate were already used. Fiscal policy — debt is already a big problem. Monetary policy – more easy money will only lead to further commodity inflation and a more leveraged economy. Not that policy makers won’t use this to provide more temporary release just to make people happy a while longer.
For disclosure, I rent. I had to move twice in the last two years – once because landlord is a real pain, another time because landlord wants to move back. Moving is a big pain, and I have to say that owning has certain quality of life advantages. But I’m sticking with renting for now.
