When it comes to real estate in California, Los Angeles and the San Francisco Bay Area are the giants of the housing market. Home prices remain steadily higher than San Diego in these two regions, with some sources reporting that the sales process is quicker as well—an average of 44 days for escrow to close in LA and the Bay Area vs. an average of 55 days to close in San Diego (for 2013).
We’re Expensive… But Not That Expensive
San Diego is still up there with LA and the Bay Area as among the most expensive cities in the U.S. in which to buy a home. The rankings, according to a recent Kiplinger.com survey of “Most Expensive U.S. Cities to Live in,” are as follows:
- San Diego at #10 with a median home value of $477,800 (more than double the national average)
- Los Angeles at #9 with a slightly less median home value of $470,00, but with a slightly higher cost of living than San Diego
- San Francisco at #3 with a median home value of $750,900, nearly three times the national average
Most in Unsold Inventory By a Small Margin
According to the California Association of Realtors, the amount of unsold inventory differs in the three cities. For the Unsold Inventory Index, San Diego County leads at four percent, with Los Angeles County (3.8 percent) and San Francisco County (3.7 percent) fairly close behind.
Longer Time on Market
When it comes to Median Time of Market, the C.A.R. market update lists San Francisco County at 20.9, San Diego County at 24.1 and Los Angeles County at 20.9.
The percentage of short sales in San Diego County is 0.7 percent. Los Angeles County, with 6.8 percent of short sales, is far ahead. The two areas are closer in Real Estate Owned properties for sale, with San Diego County at two percent and Los Angeles County at 2.6 percent. (Figures for San Francisco County in these two areas are not available.)
Another factor affecting “the most desirable neighborhoods” in these three counties is a lack of available land.
“When there is development in such neighborhoods, it often involves tearing down a $1 million home and replacing it with one that is three times more expensive,” notes Ross Gerber, CEO and president of the investment firm Gerber Kawasaki. “While this is good for surrounding homeowners—who see the value of their properties go up—it makes the broader market more challenging for prospective buyers.”
Big or Small, Old or New
Each county has its own housing needs based on demand. While a larger population correlates to more housing, the types of homes a buyer can expect to find can vary. When looking at the year a housing structure was built, the bulk of San Diego County (43.6%) was built between 1970-1989. Surprisingly, the majority of San Francisco County’s housing structures (49.8%) were built in 1939 or earlier (U.S. Census Bureau).
San Diego County leads the way in the subcategory of housing with nine rooms or more, accounting for 9.2% of total homes, while San Francisco County and Los Angeles County are 3.3% and 4.5% respectively (U.S. Census Bureau).
These two pieces of data paint a picture of the three major counties of California. San Diego is still a relatively younger city, growing in suburbs with larger homes compared to the other two.
We all know the stereotypes of each city, the Bay area tech startup employee, the Los Angeles publicist, and the San Diego surfer. While each city boasts its own diverse communities, there are some demographics that have a large influence on the housing market. According to the U.S. Census Bureau Decennial Census and American Community Survey, some examples include:
- San Diego County’s households of married-couples with children under 18 is 21.7%, while San Francisco County is 12.3%
- San Diego County’s single population is 36.1%, while San Francisco County and Los Angeles County are 47% and 41.5% (respectively)
- San Diego County and Los Angeles County leads in health care and educational services as the largest percentage of the workforce, while San Francisco County leads is “Professional and scientific”
This is merely a snapshot of some of the difference between the demographic profiles of the three counties. But economic factors like jobs and employment, in addition to marriage and birth rate help explain some of the other data listed above.
In general, it appears that the housing market in San Diego County is lagging behind home growth compared to Los Angeles County and San Francisco County. The good news is, San Diego remains among the most sought-after areas of the country in which to live—as long as you can afford it.