Why we are in this market: San Diego Supply & Demand
It's an economic law and it's nonnegotiable.
Supply: Low + Demand: High = Rising Prices.
We have had many years of low output in new home construction due to the economy. Since 2008, the U.S. has been producing about 50% under what we need annually in new housing; approximately 500 thousand units instead of 1 million new units. Our existing inventory is aging too. Almost 75% of our San Diego re-sale homes were built in or before the 1990's and date back to the 1920's. Which means our average resale home is 20-90 years old.
In the U.S. we need 16 million new units in the next 10 years to meet our projected housing demand, based on population growth through: births, immigration and people living longer.
Employment factors and the Banking Industry have prevented prices from running away like they did from 1999-2006, but here in San Diego, we have seen an average 16% increase in pricing across the county, a 43% drop in distressed property inventory and a 33% increase in new home sales since 2011. I started warning buyers in 11/2011, "I'm seeing the pace pick up and prices climb with the increased demand." Buyer that could have bought then and didn't will be kicking them selves as they pay 16-33% higher prices for that same home in 2011, or worse, now they can't afford that same home and must lower their criteria.
The market we've been in since the 4th quarter of 2011 is projected to last through 2015, mostly because new home construction takes about 3 years to show up in the market place and in Metro or San Diego Proper, we do not have many places for new homes, which means areas like Chula Vista, Otay Mesa, San Marcos, Vista, etc. are where we are seeing our majority of new home projects, leaving San Diego proper in a high demand low supply scenario.
It's time to get creative with your Realtors! Here's what I do: Strategy