La Costa Real Estate Market in 2014?

Ever wonder what we’ll see in the La Costa Real Estate Market in 2014?

Yesterday, we attended a terrific event hosted by radio personality Craig Sewing, who shared the stage with Alan Nevin, a leading California real estate economist.

• Alan Nevin contends that government in Washington DC is mostly theater and drama. Of more interest are the Feds, who indicate interest rates will be staying put for the next three years. Hence, he predicts mortgage rates will stay down–even after Ben Bernanke’s departure. This bodes well for Carlsbad and La Costa real estate buyers, many of whom count on lower rates to qualify for loans–and our pricier market.

• So how does this affect San Diego real estate–and Carlsbad in particular? Nevin says San Diego as a whole has a problem: Lack of new housing–which won’t pick up in San Diego until 2015. And since each new home sale generates 4 resales, he says, the San Diego real estate market should have increased strength through 2015. One of Carlsbad and La Costa’s big issues is buildable land. However, we do have the La Costa Town Center coming on board in the next year or so and we’ll see new home building there.

• Where will housing inventory come from in the meantime? Nevin explains that 43% of San Diego’s condos are owned by investors, while 20% of its single family homes are owned by the same group. He believes that many of these investors will be taking profits off the table, which will result in inventory levels opening up. I believe we will see investor-owners of La Costa condos and some single family dwellings do some profit-taking in the near future–especially with the recent runup in prices.

• Nevin went on to note that 30% of all home purchases in San Diego are cash sales and that 28% of all San Diego homes and condos have no mortgage debt.

• Foreclosures in San Diego were never as bad as in many other communities (Phoenix, Las Vegas, et al)–and we also bounced back faster than most. This was certainly the case in La Costa and Carlsbad! And some zip codes here are back to where they were pre-bust. We are seeing that in the 92009 Carlsbad zip where homes in La Costa Valley that were purchased at the height of the 2004-2005 market are now back up to those same prices. Ditto for Encinitas, Carmel Valley and other coastal communities.
• What about October 17 and the debt ceiling crisis? Should we worry? Nevin dismisses it as more Washington drama–and not the reality of the economy. Selected states are doing very well–including California and Texas-while others such as Michigan, Indiana, Illiniois and Pennsylvania are suffering, primarily because they are tied to “yesterday’s economy,” says Nevin, who went on to say that San Diego  jobs “are tied to tomorrow” and that we will continue to gain jobs–especially high paying ones. As an example, Qualcom pays engineers just out of college a handsome $90,000 per year salary.

Finally, when asked if our country will go broke–Nevin responds that the Federal Government owns 90 percent of Nevada and a massive number of debt-free office buildings and real estate. The government, if it chose to do so, could sell some of these holdings or syndicate them for profit. The U.S. economy–and certainly that of San Diego–isn’t in the glum condition so often reported by mainstream media.

We live and work in La Costa and if you are thinking of either buying or selling here, please feel free to explore your options with us. Scott or I can be reached at either 877-818-8197 or 760-402-9101.