I thought it would be fun to check back in with an update on the San Diego / King County home price comparison I made back in March.
As of the latest Case-Shiller data (February) home prices San Diego have fallen 24% from their November 2006 peak. The Seattle area has dropped 6.5% from its July 2007 peak.
April median price for all homes sold (single-family + condos):
- San Diego County: $400,000 (source: San Diego Union-Tribune)
- King County: $410,000 (source: NWMLS)
Both counties had an anemic spring bounce of sorts, but that didn’t stop aggregate home prices in San Diego County from falling below King County, thanks to a huge drop in March. Here’s an update of the graph from March, based on the following two supposedly realistic assumptions:
- King County home prices will remain flat through December.
- San Diego County home prices will continue to decline, at roughly half the rate they have dropped in the last six months.
The gap has widened since March, and those assumptions now lead to an 11% price difference by the end of the year. But of course San Diego doesn’t have any tech jobs, and their economy is basically in the toilet, so that makes perfect sense. Wait, neither of those statements is true at all.
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36 responses so far ↓
1
Affluent Bitter Renter
// May 20, 2008 at 7:12 am
It’s just a rational response to global warming - house purchasers realize that Seattle will soon have Santa Barbara’s climate (heck, it may even stop snowing in April!), while San Diego will soon be a sun-blasted moonscape. After all, who wants to live in San Diego, really?
2
cutienoua
// May 20, 2008 at 7:19 am
Median price is not that relevant.
3
Gill
// May 20, 2008 at 7:37 am
Also remember that San Diego county is HUGE an encompasses a lot of sprawl to the east of the city. A very, VERY different market than King. Why compare these two counties? What’s the point?
4
NotaBull
// May 20, 2008 at 7:59 am
“Also remember that San Diego county is HUGE an encompasses a lot of sprawl to the east of the city. A very, VERY different market than King. Why compare these two counties? What’s the point?”
I kinda agree and disagree with that. Having lived there, I would have to estimate that San Diego county is more in line with King+Snohomish+Pierce. So it might be more “fair” to compare San Diego to those counties combined. I actually think the Case Shiller index does exactly that, and perhaps that would be a better way to look at it.
On the other hand, even the nice areas down there are experiencing declines. I have a friend currently selling a place that’s in Encinitas (west of I5). It’s 2-3 miles from the beach and he estimates it’s down 15% from the peak. Given the scale of the decline down there, I don’t think the comparison is meaningless.
I also have friends that moved up to Seattle from San Diego recently. Winter is really getting to them, and I’m guessing that if prices don’t drop here at much as down there (which is quite likely IMO) then they’ll possibly move back in a few years. We shall have to see how that pans out. Ultimately, I think the relative price difference between CA and WA is what feeds a lot of the migration towards WA. If WA is more expensive than many areas in CA, less people will move here. How *many* less is the big question.
5
vboring
// May 20, 2008 at 8:03 am
San Diego county
area: 4526 sq mi
pop: 3.1mil
pop density: 688 people/sq mi
King County
area: 2307 sq mi
pop: 1.8 mil
pop density: 782 people/sq mi
so, San Diego County is about twice as big and King is about 15% more densely populated. both encompass a fair bit of sprawl in the east. both have less desirable areas to the south and plenty of room to put more houses nearby. both are coastal and home to high tech companies. weather is a matter of preference of too hot versus too rainy.
it sounds like more similarities than difference to me.
it’d be interesting to see how the rates of mortgage fraud compared. that’d be a good indicator for future market movement.
6
Ira Sacharoff
// May 20, 2008 at 8:10 am
Wait a minute! Is this Seattle Bubble telling me that King County house prices are going to remain flat through December?
Isn’t that maybe a little optimistic?
I thought a good reason not to buy here right now was because home prices were dropping, and we didn’t know where the bottom was. But if prices are just flat, doesn’t that suggest that the risk is somewhat lessened?
7
Affluent Bitter Renter
// May 20, 2008 at 8:22 am
“Also remember that San Diego county is HUGE an encompasses a lot of sprawl to the east of the city. A very, VERY different market than King. Why compare these two counties? What’s the point?”
Because housing prices in San Diego Co have traditionally been significantly higher than King Co, incorporating the premium for nice weather. Either people have stopped being willing to pay more for living in a Mediterranean climate, or San Diego prices are going to shoot up, or KIng County prices will drop.
I’d know which way I’d bet…
8
Mirtika
// May 20, 2008 at 8:37 am
Well, hubby got recent offers from both Microsoft and QualComm. I had been searching rental prices and keeping an eye on home prices in both places, just in case. (Home base now: Miami) COL calculators gave the edge to Seattle area by a LOT, compared to S.D.
Well, I found that rentals for home in Eastside (ie, nice places to get a house with yard, which we’re used to having) were running way less expensively than comparably-sized nice homes in Encinitas/Carlsbad (areas I was looking at in San Diego, at the advice of a friend on who lives there).
However, I also noticed home prices dropping in San Diego, moreso than Seattle area. And I wondered what would happen to rents. Hmmm.
In any case, though the QualComm offer was mighty tasty, we decided on a less generous offer locally, since the South Florida housing market is in a crazy freefall and selling our place would be a nightmare right now.
Had we been renters, we could be making some nice moolah in the San Diego area or getting mizzled on in Seattle.
There’s another plus for renting–you aren’t captive to weird market situations after a lay-off.
Ah, well. I like being close to family more than I like wads of cash. :)
9
The Tim
// May 20, 2008 at 8:39 am
Ira, you’re in a snarky mood this morning, aren’t ya? :^)
Note my tone of skepticism when I say “…based on the following two supposedly realistic assumptions.”
Also note the paragraph I didn’t bother repeating from the March post:
I suspect you already knew that I don’t believe prices will stay flat, but I thought I’d respond for the benefit of anyone who may have been genuinely confused.
10
Gill
// May 20, 2008 at 9:09 am
I used to live in SD –
The post doesn’t even begin to speak to the huge influx of population to the east of San Diego that occurred in the past few years, of which a large portion was immigrant based, etc.
The economies are much different because the exurbs and suburbs encompass a much larger part of the population (huge recent increase) than King county.
Two completely different places, IMO.
11
deejayoh
// May 20, 2008 at 9:25 am
I think one of the reasons for the comparison was this blog post by Tim. The article referred to shows the risky loan status of Seattle and San Diego to be almost identical.
That, and as Tim points out, it’s kind of fun to make the comparison.
12
The Tim
// May 20, 2008 at 9:30 am
Let me put it this way, San Diego is probably the most comparable California city to Seattle (for the reasons laid out by vboring @5), and yes, it’s just fun/interesting, IMO.
13
softwarengineer
// May 20, 2008 at 9:45 am
THEY”LL BE SINGING
“California here I come, right back where I started from…” LOL
14
NotaBull
// May 20, 2008 at 9:57 am
TheTim,
Although I agree that the cities are comparable (except for weather of course), the county boundaries and makeup are significantly different.
So while I agree that it’s fun/interesting, I think a more accurate picture might be obtained by looking at Pierce/King/Snohomish. To me, having lived in both areas, this would seem more “fair” in terms of the makeup of rich, nice, crappy, city, exurb.
I think that Case Shiller does exactly this. For San Diego, it uses San Diego County. For “Seattle” it uses King/Snohomish/Pierce as I suggest above.
Do you think it’s possible to combine the medians of K/S/P counties to get an overall median? Without having every sale, I’m not sure how you would do this, although I’m sure you could do a weighted average and kinda come close?
15
Jonny
// May 20, 2008 at 9:59 am
or “I left my ___ in San Diego?”
16
jon
// May 20, 2008 at 10:06 am
My own preference is for the year-round green of the PNW. Also, the difference in taxes between CA and WA is more than enough for a winter vacation to somewhere new each year.
Those fires last year have probably left a lasting image in peoples’ minds who were considering moving there at the time, as I once was.
That said, I think prices are over-reacting in CA, and will recover once the oversupply is absorbed. CA has always been very cyclical.
17
Gill
// May 20, 2008 at 10:35 am
Sorry, didn’t mean to be so severe — I can go in for some fun : )
18
goin' for it
// May 20, 2008 at 10:48 am
Hi everyone, I wanted to post this back in the “Quadrant cuts 6%” posting but this one is more current.
I work for the UW Technologies department and guess what they’re doing today? Laying off roughly 20% of our workforce (100 people). Hello?! Knock, knock!! Government jobs being cut back here already people. Some of these people have been here 20+ years.
Well, heres to hoping I don’t get a surprise “meeting” today.
19
Dash Pointer
// May 20, 2008 at 11:32 am
San Diego was perhaps the most leading indicator of an RE meltdown on the west coast. What I took from that graph is a suggestion of where PNW may be heading, although the demographics of the two areas may be slightly different–SD most likely has a larger retired population.
20
Matt
// May 20, 2008 at 11:33 am
A little more data for people…clearly, be careful with Trulia data (selection bias), but it’s helpful for me to see the stats discussed above graphically represented:
SD County Heatmap: http://www.trulia.com/home_prices/California/San_Diego_County-heat_map/
King County Heatmap: http://www.trulia.com/home_prices/Washington/King_County-heat_map/
21
SeattleMoose
// May 20, 2008 at 12:14 pm
San Diego says to Seattle……..”Seattle….meet your future”
22
Civil Servant
// May 20, 2008 at 12:19 pm
Matt at #20 — I’m not familiar with Trulia. Can you fill me in just briefly on the nature/direction of its selection bias? Looks like a giant pile of sexy data to me, so I want to make sure I insert the right skepticism filter before I dive in. Thanks for the intel and the links.
23
Garth
// May 20, 2008 at 12:43 pm
Civil Servant,
Basicly they are not a member of any of the MLS services and their listing data is scraped or received from feeds provided by agents / real estate companies selectively.
As a result they show median price increases on everything other than 1 br properties over the last year in seattle.
http://www.trulia.com/real_estate/Seattle-Washington/
I have played with the api some, and the data is useless as far as I can tell, it may improve if they figure out a legal way to get the data.
24
I actually like it here
// May 20, 2008 at 12:56 pm
I think neighborhood comparisons might tell a more convincing story. How does Queen Anne compare to La Jolla? How does Burien compare to El Cajon. There’s a lot of stuff going on in these county-county stats. Neighborhoods might give a truer picture.
25
MisterBubble
// May 20, 2008 at 2:12 pm
Ya gotta love the hypocrisy of the bubble boosters…when SD was on the way up, all you heard around here was how similar Seattle was to SD, how the “equity locusts” were going to move to Seattle from SD, and how Seattle was destined to be the next SoCal beach community. Those of us who pointed out that the comparison was absurd, just based upon the weather? Yeah…we were laughed out of the room.
Now, though? Well, now the tables have turned! Poor San Diego doesn’t have a friend in Seattle. It’s a bit sad, really.
Anyway…since it seems you’re all in the mood to see the (very real) differences between Seattle and California cities, whaddya say we revisit some of those rose-colored comparisons with San Francisco that everyone around here loves to make?
26
Civil Servant
// May 20, 2008 at 2:21 pm
Thank you kindly, Garth. I did mess around in there a bit more after I posted, and at the neighborhood level it gets pretty whiffy. Some staggering YOY increases that just don’t make sense based on the property-level listings I’ve seen, for instance. Oh well.
27
jon
// May 20, 2008 at 3:38 pm
The calculatedrisk blog posted this:
“A total of 15,615 new and resale houses and condos sold in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties in April. That was up 21.9 percent from 12,808 the previous month but down 19 percent from 19,269 in April last year, according to DataQuick Information Systems. ”
http://calculatedrisk.blogspot.com/2008/05/dataquick-on-socal-sales-surge-in-march.html
Maybe they can finally sell and move to Seattle now!
28
Bits_of_Real_Panther
// May 20, 2008 at 4:05 pm
I’m in SF right now and can’t wait to move back to the northwest, and I’ll gladly take 20% less pay to do so. 90% of The City is ghetto and that percentage goes up if you throw in the east bay. Then there’s the state’s financial woes - using future lottery earnings to finance a budget deficit? RIDICULOUS
29
MacAttack
// May 20, 2008 at 4:33 pm
“Two completely different places, IMO.” Yeah. One is sunny.
30
Ira Sacharoff
// May 20, 2008 at 5:09 pm
“Ira, you’re in a snarky mood this morning, aren’t ya? :^)”
Yeah, I was just trying to get some discussion rolling.
31
Shawn
// May 20, 2008 at 8:44 pm
Hi all,
thanks again for the rental info. I am going to be living in Redmond to be close to work. I prefer North Seattle where my Mom and sisters live, but for my first year of work I want to rent a place close to work. I am so freaking tired of commuting.
32
Katrina Munsell
// May 21, 2008 at 3:16 pm
Having lived in both cities, I find the comparison interesting…I think median income in both areas might be interesting as well…
33
Jackson Wallace
// May 23, 2008 at 1:49 am
California is taking a dirt nap, and while we may be able to smugly laugh about it, the fact remains that if CA takes a dive, so will the entire country. As far as Seattle having Santa Barbara’s weather, get serious….
34
Nick
// May 23, 2008 at 1:58 pm
“both are coastal”
Link?
35
Housing Bust Slowing Population Growth | Seattle Bubble — News & discussion about real estate & the housing bubble in the Seattle area.
// Jul 3, 2008 at 10:34 am
[...] those places become even more desirable, which can only lead to some people leaving Seattle for more affordable, sunny [...]
36
SD Dan
// Jul 8, 2008 at 1:15 am
Well, having moved from Seattle to San Diego last July… the cities have some similarities, but there are big differences.
San Diego has no large corporate headquarters, save Sempra Energy and Qualcomm. There’s no Starbucks or Nordstrom or Amazon or Microsoft or Boeing (oops, but you know what I mean). There are lots of smaller companies, particularly in the wireless, medical device, and biotech fields.
It’s much easier to get around town–the freeways don’t have nearly the congestion, and there aren’t nasty chokepoints like 520 or I-5 north. The trolley is occasionally useful.
There is a lot of government spending, but it’s not as central to the economy as it was.
Property taxes are a bit lower than they what I paid here, but not by much. Sales tax is slightly lower. There is state income tax, though, at some 9% of your federal taxes.
Electricity is definitely more expensive. Gas is too. Food is somewhat cheaper, both eating out and at the store, but not enough to make a difference. You don’t need to run heat or AC most of the time… it’s not really hot if you’re within 10 miles of the ocean, then it gets a lot warmer. There’s a breeze most afternoons that comes off the ocean which is nice.
San Diego has a lot of hidden corners. For some reason, it’s not an easy city to get to know.
Oh, and immigrants don’t live in the far eastern exurbs (Alpine, Lakeside) which are very conservative, and the southern suburbs of Chula Vista have some shiny new million dollar homes on their eastern side.
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