San Diego may seem expensive to you, but I moved here in 2001 from the Bay Area because of the weather and the “affordable” prices. We bought for about $600k during the stock market crash and I heard about how there would be tons of foreclosures and the houses would be worth $300k in a year. Well, the opposite happened. With the recent downturn in prices over the last 18 months, San Diego is again looking more affordable to people from other CA areas – specifically LA/Orange County and the Bay Area.
I’m orignally from the Midwest (Chicago suburbs) and I’m astonished that homes back there are so expensive, but buying a home is what everyone does in their 20’s or whenver they get married. That leads in turn to the move up buyers in their 30’s and 40’s and 50’s which fuels the market. There are new $600k homes out there 50 miles from Chicago covered in 3 fet of snow where cornfields once stood. If you had told me 10 years ago that you would have to pay that price for a home in the boonies I would have bet my life against it. There might be pockets where you’re going to see depreciation, but prices are not going to crash. You have to look around at prices elsewhere and ask yourself what the premium should be for living here.
