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San Diego, a city of 1.4 million residents, has earned the glowing monikers of “America’s Finest City” and “California’s Beach City.” Among the area’s chief attractions are its 70 miles of coastline and its world-famous tourist attractions, such as the San Diego Zoo, USS Midway Museum, Balboa Park, and San Diego Museum of Art.
Through the years, San Diego’s economy has been fueled mostly by tourism, naval bases, research, manufacturing, and biotechnology. A big draw for living in San Diego has been the ability to take advantage of outdoor activities and space.
The real estate market is a microcosm of the nation—albeit at prices few other cities can match.
“Prices have been climbing for a few years,” says Nick Noonan, a real estate pro with Compass, who formerly played professional baseball for the San Diego Padres and San Francisco Giants. In recent months, he has witnessed an increasing number of cash offers, with first-time home buyers looking in the $600,000 to $800,000 range. Houses listed at $1 million are selling for $100,000 above their listing price, he says. And days on market are as short as five to seven days. “It makes it extremely tough for someone buying with a mortgage, and also complicates appraisals,” he says.
The pool of entry-level buyers—often in their 20s and 30s— often can afford only an older condo, “not their forever home,” he says. Yet, despite the difficulty of getting their foot in the door, this clientele still seeks valuable amenities, such as a pool, rooftop barbecue, or free water or trash service, based on the price of the monthly HOA fees. Today’s sellers are often leaving the state for a job or taking advantage of their run-up in equity, Noonan says.
Ron Oster, SFR, with Coldwell Banker West, has catered for several decades to a more affluent buyer market. Oster is also witnessing a big jump in prices and demand. “There’s definitely a buyer frenzy, with agents getting five to 10 offers after a bidding war,” he says.
In fact, Michael Bianchi, vice president and general manager with Pacific Sotheby’s International Realty, says he has never seen days on market so short, even after the country was coming out of the Great Recession and “very aggressive buyers were eager to buy homes.”
All price points up to $2.5 million are difficult because of the lack of inventory for those who want space to work from home, Bianchi says. “Lack of inventory is a result of 10 years of not enough construction, the landlocked nature of coastal real estate, government intervention, and a genuine lack of interest on the part of owners in selling. The bottom line,” he says, “is clients need true professionals to guide them through the process; otherwise, it could be risky.”
Not surprisingly, many stay put in San Diego, like native New Yorker Deborah Richter Shubert, owner of the area catering firm Decidedly Better. She has experienced a huge uptick in the value of her 1918 bungalow. She bought it for $120,000 in 1986, when she thought she overpaid, and now estimates it’s worth many multiples of that.
“I love living in San Diego for so many reasons. The weather is good; I can see the ocean, islands, bay, and Coronado from a park a few blocks away,” she says.“I drive through beautiful parks, walk to great shops and restaurants, and have neighbors whose children played ball with my son, who lives nearby. What’s not to love?”
