It’s official. My home base, San Diego, has done it. San Diego the nation’s second least affordable city for buying a home behind San Francisco.
“The report says a person in San Diego would need to earn $98,534 a year to buy a $483,000 home, the county’s median price in the first quarter.”
Well, I have good news and I have bad news. The good news? As advertised, San Diego is a beautiful city, the weather is nice and it’s a nice place to live. The bad news? Real estate prices will decline to the tune of 50% over the next 10 years.
Let me be crystal clear. Anyone…..anyone buying a house at today’s prices will lose a ton of money. Don’t worry, I know that most people (particularly in San Diego) will disagree with me. Yet, most of these people have no idea of where we are in the composition of the overall economic cycle, its application to real estate, real estate valuation work and so on.
Very briefly, what we saw in the real estate market between 2006-2010 was just the initial decline in the secular Real Estate Bear Market(stage 1). What we have witnessed since, 2010-today (stage 2) is a “Dead Cat Bounce”. What’s next?
Stage 3….a massive decline followed by another bounce and then by a final leg down. Now, these things don’t happen overnight. They take years to play out. My timing work shows the bottom in San Diego real estate prices arriving around 2022-2024…. at the earliest.
Again with 50% or more price haircut expected, it would be VERY wise not to touch real estate in San Diego with a ten foot pole. If you need more information you can read my comprehensive report here Real Estate Collapse 2.0 Why, How & When
