San Diego housing recovery spurs economic recovery
Real estate in San Diego is in high demand and recent reports have indicated a strong housing market recovery as home prices continue to rise and investments flood the area. In a recent article, the San Diego Union-Tribune cited a forecast done by Beacon Economics that indicated that San Diego County's economy will experience the fastest recovery in the Southern California area.
The forecast indicated that a tourism boost, expansion in professional services and investment in biotechnology is pushing recovery in San Diego forward. However, Beacon Economics did maintain that it will still take a few years for the unemployment rate to reach the level it was at before the recession.
"Growth is continuing to move forward at a slow pace," Beacon Economic's director of economic research Jordan Levine said. "We're not going to come falling back down to historical norms over the course of 12 months but definitely moving in the right direction."
The San Diego Union-Tribune reported that nearly half of the state of California's venture capital investment in biotechnology comes from San Diego County, which amounted to nearly $370 million in the first quarter of 2012 alone. In addition, hotel room rates are up 9 percent since 2009, with nightly room rates increasing by 1.7 percent to $128.47 on average.
In a recent release, Real Estate Marketing Insider's Tobias Nergarden commented that the observed increase in consumer spending has been a result of increased home sales, and this will help home sales further as increased consumer spending means that consumers are willing to pay higher prices for homes.
Beacon Economics presented its forecast on October 3 and covered topics including local and statewide labor market, the fiscal cliff, the state of the housing market, and the overall direction of the San Diego economy.
"A lot of this pent up demand, rising income and improving labor markets are helping consumers feel more comfortable to get out there and make those long term purchases," Levine said in the presentation.
The forecast reported that San Diego County has seen four quarters of consecutive year-over-year growth in single family homes sales. In the second quarter of 2012, foreclosures were also observed to be at their lowest levels in five years. Home sales in San Diego County have increased by 11 percent since they bottomed out. The forecast additionally predicts that permits for single-family and multi-family units will double by 2014.