Permabear I think it is a combo of many things. As Rich pointed out the deviation from the median now and the median in the 90’s is not to far off. One thing you can take solace in is that it is not as bad as say 2004.
I think also that the competition for the type of home you are looking for, in the neighborhood you want is extreme. Think about it…. The reality is that there are a handful of communities that ALOT of people are competing for. These are pretty much based on schools and locale. If you lump in that the home has to be less then 15 years old then it gets REALLY tough. The job growth of companies like Qualcomm and Broadcomm cannot be ignored either. In 1996 Broadcomm had a VERY small presence in San Diego. Now look at it down here. Need we discuss the growth of Qualcomm since 1996? These are but two examples. While the dot com bust was brutal there were a HELL of alot of people that made money off of it and plunked themselves into homes. There have been well positioned people from out of state, from out of the country who come/came to live here.
There will always be those who like to say this is all a mirage and realtorspeak but the facts have been this way for decades. I will bet any amount of money that San Diego real estate, especially what you want will always be above the median, sometimes way above it, sometimes not so way above it. The truth is you CAN buy a big beautiful home for alot cheaper but it will not be in those neighborhoods. Maybe you are farther east, maybe in Temecula.
The bottom line is that the white collar employment in San Diego on a percentage basis of the total working population, combined with the climate, combined with the military (ALOT of seasoned officers) combined with biotech/medical/UCSD, against a fairly constrained inventory with regards to housing age/school quality/physical locations will always put pressure on pricing. Radical moves in rates will help destablize it.
As sdr posted you can find some deals if you are patient and look hard enough. Or go get a hard money loan and purchase at trustee sale and then refi out in a few months and get a conventional loan.
