San Diego is full of micro-climates, so why not acknowledge its micro-economies as well?
Overall, the San Diego real estate market looks pretty gloomy: There were 3666 San Diego real estate foreclosures during the first quarter of 2008, compared to 1182 during the first quarter of 2007, and 2296 during the last quarter of 2007. And most of the loans that went into default were originated between August, 2005 and October, 2006.
The bloodiest real estate markets in San Diego County, though, occur in those areas with newer construction, where builders sold homes and condos to thousands of first time home buyers on stated income and ARM loans. Poster cities for the foreclosure mess would have to include South Bay cities such as Chula Vista , where up to 79 percent of recent sales were foreclosures–as well as Spring Valley, Encanto, Nestor, North Oceanside (92057), the College area (92115) and Paradise Hills, where over half of all sales are foreclosures.
Coastal cities, with their micro climates and stronger local economies (tourism helps) are generally populated with more established and more expensive neighborhoods that were off limits to most first time home buyers. Cities such as Coronado, La Jolla, Del Mar, Solana Beach, Encinitas, Carlsbad and West -of-5 Oceanside (92054) have weathered San Diego’s foreclosure storm pretty well with somewhere between 0.3 to 2.0 foreclosures per 1000 homes. Compare that to 14.1 to 15.5 per thousand for South Bay communities in the 91915 and 92173 zip codes.
And as bad as some of these numbers look, San Diego County is still faring far better than truly battered inland Riverside and San Bernardino Counties–and central California counties as well.
So what is a buyer of San Diego real estate to do?
We are advising our real estate clients to stay coastal if at all possible. These are the blue chip properties of San Diego County and tend to hold their value best during tough economic times. The number of affluent home buyers who wish to escape the dark and cold winters in the Midwest–or the desert retirees who can no longer stand the summer heat of the deserts–are still seeking the year round balmy climate of coastal San Diego.
Now, however, these same relocating Americans are competing with smiling foreign buyers who can buy the San Diego beach lifestyle with Euros, Loonies, Yuan and Yen and cash in on the battered US Dollar.
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