Stock market up, helping with savings for down payments
Unemployment at 10 year low
Large number of properties can still be purchased and rented for immediate positive cash flow or for below cost of rent with mortgage interest deduction
Continued inflow for foreign money
Possible increases in Navy funding
San Diego up less than all the other major West Coast markets, making it a relative value
Bearish:
Trump uncertainty
Problems at Qualcomm
Low rates leading to lower payments than rent don’t help first time buyers who can’t save a down payment
China slowdown and attempts at capital outflow
While buy to rent investments are good, investors will not get nearly as good returns as they did 2-5 years ago and may decide to wait / pay down their highest rate mortgage
Putting these all together, I think the bull factors seem a lot stronger.
Let’s hope that after people realize how unstable Trump is, that the market gains will go *poof.* Market gains going *poof* plus a lot of uncertainty as far as policies would be great for buyers.
Add to that the fact that 23.5% of SD County’s population is foreign born. Trump’s immigration games just threw a huge amount of uncertainty into the back of any non-citizen’s (or even recent citizen’s) minds.
(Bonus points if four years of Trump chaos means that GOP will be locked out of the White House for the next 20 years. Buying opportunity and the Teabaggers discredited once and for all, who can argue with that?)
Large number of properties can still be purchased and rented for immediate positive cash flow or for below cost of rent with mortgage interest deduction
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Not sure about this one ↑ you do know that in La Jolla the average house is going for $4.3 Million http://www.sdlookup.com/Market-92037-La_Jolla. It might take more than the average 20% down to make it pencil out positive cash flow. I was even surprised to find out that the $5 Million dollar house being raffled by Ronald McDonald House Charities is only slightly above average in price for the zip code.
IMO have a much larger role even more so than the economy, interest rates etc… for housing and markets in general.
like in the mid/late 80’s you had the largest bulge of the population reaching their late 20’s, the same thing is happening again with the current generation.
I agree a SFH in La Jolla does not pencil out as a rental., but that is more because people who have 20,000 a month to spend on housing are going to buy something not rent. Other than little 550sf cottages by the beach, very few are occupied by renters so in markets like this rent does not have much relevance.
A SFH in La Jolla is a trophy property. These never follow the normal rules because the owners receive value simply from ownership beyond any “rational” economic factor.
I think La Jolla rents are also suppressed by the pickiness of the owners. They worry, correctly, that their home would be used as a big party house.
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