What happens if mortgage interest rates go up from the current record lows of 4% for a 30 year mortgage to a more typical 7-8%? How much would people be willing/able to pay for houses then?
Also, while the US as a whole has low housing costs, that is not true for San Diego. In addition, transportation costs in the US (and especially San Diego) are much higher than almost anywhere else in the world. Just think about the cost of buying a car, paying the taxes/reg fees, insurance, maintenance, and all the gas. In much of the world, people walk to work or take public transit, which is much more cost effective.
SD House prices may go sideways for a long time, but I think there IS a lot of downside risk.
