By MIKE ALLEN
Local experts looking ahead to San Diego’s economy this year disagreed on such factors as population growth, the inflation rate and home price appreciation, but were unanimous in making housing affordability the critical issue facing the region.
The Economic Roundtable took place in January.
The region has fallen behind a group of cities it competes with for attracting high-tech businesses here when it comes to escalating housing prices, said Julie Meier Wright, chief executive of the San Diego Regional Economic Development Corp.
“Our median housing price is nearly double all the rest (of five key competitor cities) except for Seattle,” Wright said.
Only 9% of San Diego residents could afford the county’s median-priced home in December, down from 11% a year earlier, according to the California Association of Realtors.
Without enough affordable housing, San Diego stands to lose not only jobs created by existing and new businesses, but will likely see an exodus of children of existing homeowners who cannot consider the steep prices for even first-time buyers, said Gary London, the president of London Group Realty Advisors in San Diego.
“The question is will our children be able to live here, or will they have to move somewhere else?” London said.
London expects home prices to decline 5.5% this year.
Two others weighing in on the issue predicted an increase in home prices of 8% and 5%.
But the big story really is that construction costs have risen so much in recent years, yet revenues the new projects generate haven’t kept pace, London said.
“Don’t expect many or any big, vertical high-rises, commercial or residential, to be breaking ground in San Diego this year,” he said.
San Diego has done better than most other regions in generating jobs and maintaining low unemployment, but the high housing prices are taking a toll, said Marney Cox, chief economist with the San Diego Association of Governments, in his presentation.
The area’s population is expected to continue climbing by about 42,000 this year, the average during the past five years. But the numbers of new residents moving here from outside the area declined last year.
The increase resulted from a natural net rise in births over deaths, Cox said.
Allen is a staff writer with the San Diego Business Journal.
