How You Can Tell San Diego’s Housing Market Is Recovering
Things can get a little confusing when it comes to figuring out what’s going on with the real estate market here in San Diego. After all, the past few years hasn’t inspired a whole lot of confidence. Is the San Diego real estate market recovering? Will it fall even more? Buy now? Sell now? Rent? Of course, no one has a crystal ball to look directly into the future to figure out what to do now. How great would that be?
But a new article by David Crook in the Wall Street Journal does provide us with a bit of help by outlining key market indicators that are strong signals of a recovering market. And San Diego, you’ll be happy to hear, is currently is signalling loud and clear — now is the time to buy in San Diego. So we might not have a crystal ball, but perhaps a nice pair of eyeglasses? Let’s use them to take a look at those key indicators.
EMPLOYMENT
There has long been a relationship between local employment rates and the real estate market. Crook writes, “Clearly, the No. 1 factor in determining whether a community has passed through the worst of the housing debacle is its current state of employment.” Using North Carolina as example of a state with counties that have hit bottom and are on the upswing, Crook explains that the state’s top three counties that are less than double-digits off home price highs are also cities that are beneath the state’s May unemployment rate, “Although North Carolina’s unemployment rate [9.7%] is higher than the national average [8.7%], all three communities are lower [9.1%] than the state rate.”
What does North Carolina have to do with San Diego? This: California’s May unemployment rate was 11.4, while San Diego’s May unemployment rate.
Great news. And it gets better.
RENTS
Crook goes on to explain that rents are also a leading indicator of real estate values in a given area, “Home prices in most communities that have best weathered the downturn tend toward the low-rent end. That is, they have lower price-to-rent multiples, and house hunters will often find it cheaper to buy properties than to rent them.”
And wouldn’t you know it — according to Trulia’s most recent “Rent vs. Buy Index.” San Diego is ranked “Much less expensive to buy than to rent.”
See? The news gets better and better! With unemployment rates that are lower than the state average combined with lower price-to-rent multiples is even more proof that San Diego is most definitely on the upswing. Now is a good time to buy in America’s Finest City. And if it’s a good time to buy that means it’s also a good time to think about selling.
[image:Getty]
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