23 Jul Local expert predicts San Diego real estate headed toward a bubble
Is San Diego real estate headed toward a bubble?
At least one leading San Diego real estate expert thinks so – at least some parts of the San Diego real estate market. University of San Diego real estate expert Norm Miller believes some real estate in San Diego may be entering a real estate bubble that could pop during the next recession.
It’s no secret the technology industry is influencing the local economy. The tech growth is also boosting home prices and impacting real estate. San Diego is not alone in that some real estate prices have increased due to tech growth. Yet, Miller, who is the Hahn Chairman of Real Estate Finance in The School of Business Administration’s Burnham-Moores Center for Real Estate, predicts real estate prices in tech-heavy markets such as San Diego, San Francisco and San Rafael could be in for a wild ride.
San Diego isn’t alone; San Francisco, Denver, Miami, Portland, Oakland, Calif., and Berkeley are also in danger, Miller said. This is no real estate bubble but a ‘tech bubble’ that could negatively impact real estate markets if tech stock prices ever fall significantly. Miller has monitored 400,000 neighborhoods in the U.S. and 20,000 zip codes. Neighborhoods with lower equity or higher loan-to-value ratios could be particularly vulnerable, he predicted. He predicts median household income, the value of the U.S. dollar against foreign currency, in-coastal housing demand and low interest rates that could contribute to local ‘bubbles’ of some San Diego homes for sale.