The San Diego Housing Boom is Bust

About two weeks ago, Reventure Consulting posted a YouTube short spotlighting a house for sale in my neighborhood: “$1 Million Listing in San Diego that has no buyers“. I wanted to snag a photo and write something sooner, but our daughter’s medical crisis and recovery consumed my time.

At the time that Reventure Consulting CEO and Founder Nicholas Gerli released the 53-second clip, the University Heights home listed for $1,099,000, following several price reductions. Recent history: For sale at $1,222,000 on Dec. 15, 2022. Less than a month later, January 12, price dropped to $1,192,000 and to $1,162,000 thirteen days later. That led to a pending sale for the lower list price on February 21, which quickly collapsed, and the home returned for sale at $1,162,000 on February 24. Sellers dropped the price, again, on March 1 to $1,135,000 and to $1,099,000 on the 23rd.

“If you’re a home buyer of this property you need to spend $6,500 a month on your mortgage, interest, taxes, and insurance to be able to live in this house—and, unfortunately, the people here in San Diego don’t have the money to afford that”, Gerli explains. “In this zip code the median household income is $88,000 a year—pretty much exactly what the annual house payment would be for that house”.

Now when California was locked down because of SARS-CoV-2 (severe acute respiratory syndrome Coronavirus 2)/COVID-19, this house could have sold quickly and for more money. Work-from-home mandates freed tech workers from the high cost of Silicon Valley properties and opportunity to move and to what would be for them a more affordable housing market. At the time, for example, median annual salary at Google was $296,000. That’s big income, with tremendous buying power, for a relocation destination like San Diego.

But the exodus is over. Interest rates are higher. Lending is tighter. The boom is bust, and housing prices must decline. Call it coincidence, or not, but the listing was removed on April 5—a day or two after the YouTube short posted.

Oddly, my wife and I have been inside that house—when it was selling for $799,950 in early August 2017. The place was beyond our budget and we found the layout made the supposedly 1,482 square feet feel cramped.

Returning to the present, I used Samsung Galaxy S23 Ultra to take the Featured Image today. Vitals: f/1.7, ISO 10, 1/240 sec, 23mm; 11:46 a.m. PDT.