Watching real estate markets anywhere in the world is fascinating. This is because there is only one certainty: movement. While property markets shift according to a very direct supply/demand model, there is no guarantee about what will cause owners to want to sell and potential buyers to enter the market.
We can see this unpredictability by looking at real estate in San Diego over the past year. Many people assumed that the COVID-19 crisis would send property prices crashing. After all, there would be few people coming into San Diego looking to buy, and those who wanted to buy would be able to afford far less, considering the state of the economy.
However, this did not play out. While there were certainly dips over the past year, San Diego property prices never truly crashed (as was the case in other affluent cities), and hit an all-time high in September. They’re not quite where they were seven months ago, but they’re still higher than before the crisis.
To call this surprising would belie the fact that some analysts predicted it. Property is not like stocks or currency, which investors rush to sell at the first sign of trouble. On the contrary, people buying property generally have a more long term perspective. Still, there are plenty of disappointed buyers who thought they’d be getting their dream properties at a steal.
While property prices have risen in San Diego, the trends are not uniform. There are major differences between the markets in downtown San Diego and the suburbs. Here are some of the reasons why.
Traditionally, living downtown has been far more expensive than living in the suburbs. This is true around the world. The simple reason for this is that while there is less space in the city, people want to be in the center of things, close to entertainment and work. Suburbs, on the other hand, are great for families but are far from the excitement.
Over the past year, a lot has changed. One of the biggest changes has been the decentralisation of everything from entertainment to business. Instead of having to go into the office, people are working remotely. Many big companies have realized that this is a viable option and have stopped renting expensive office space.
In the city, this has caused an increase in supply and a decrease in demand. It has not severely harmed the downtown property market, but it does mean that its gains have been less significant.
Suburbs, meanwhile, provide a sense of stability and peace, especially for a world recovering from a virus that kept us all cooped up for months on end.
Another major difference between the property markets of downtown and suburban San Diego is whether people choose to rent or buy.
Renting has always been more common in the city, considering that it is more expensive and the people who want to live there are often young and upwardly mobile. Now, renting is even more attractive in the city, as we’ve realized just how much the value of location can change. Whereas buying in the city was previously a surefire way of staying in the thick of things, that is no longer guaranteed.
It is also growing increasingly easy to rent with peace of mind. You can get renters insurance in San Diego at a low price, and your possessions will be covered. Instead of risking severe financial losses simply because you don’t own a home, you can keep yourself solvent even in case of a disaster. Renting can come with a sense of security.
At the same time, more people are recognizing the value of true stability, and even those who were previously happy to rent in the suburbs now want a place that they can truly call home. It is one of the understandable effects of being stuck in one space for so long.
The property markets in San Diego are doing well. Prices have gone up in spite of COVID. However, there is subtle change happening in the way people approach suburban and downtown properties. These changes are fascinating to watch, and may have a big impact on when and where you decide to purchase a home.