The Urban Land Institute recently reported that San Diego was ranked in 10th place on their list of real estate markets to watch.
On Urban Land’s Institute 32nd yearly Emerging Trends report, which is based on interviews taking with industry experts, the company stated that coastal markets will do better than other areas of the United States, which includes the San Diego area.
On the other hand, during the convention held in Washington along with those on the internet, experts stated that no market is doing well at this time.
Jonathan Miller the author of the report stated, "We’ve been living large in a time of more," and went on to say, "In the end it all resulted in a lot of losses and some major flops. As predicted last year, 2010 would be the bottom for the commercial real estate market. In fact, we think that’s happened. Next year is, after a period of more-more-more, we’re entering this period of less — the ‘Era of Less.’"
The ranking system used a scale from 1 to 9 with 1 being "abysmal" and 9 being "excellent." San Diego ranked 5.63 and last years report had San Diego with a ranking of 5.04.
The state of Washington was ranked in 1st place, however, the investment score was only at 7.01.
Stephen Blank, Urban Land Institute main researcher and adviser of the study stated, "The transition from more to less will be difficult and it will involve getting used to a smaller real estate industry," and went on to say, "Harsh realities aside, real estate is coming off the bottom with improved prospects across all markets."
The rankings of top ten markets included:
- San Diego – 5.63
- Los Angeles – 5.84
- Houston – 6.02
- San Jose – 6.08
- Seattle – 6.09
- Boston – 6.20
- Austin – 6.29
- San Francisco – 6.34
- New York – 6.56
- Washington – 7.01
The rankings are based on viewpoint for multifamily and commercial investment.
The overall evaluation for San Diego
"San Diego’s story largely copies that of Los Angeles. These two markets, not surprisingly, can track closely together. But San Diego does not rate LA’s gateway status, lacking a major port or international airport hub like LAX."
"’Traditionally, the local economy creates startup jobs, but doesn’t retain headquarters. When companies get large, they leave,’ [stated an interviewee]. For global and domestic business, the city sits just outside primary jet ways, making travel a pain."
"As is the case everywhere else in Southern California, housing prices have dropped from stratospheric levels, savaging mortgage holders. In particular, downtown condos are badly oversupplied. Demand builds back for housing in better neighborhood: more buyers with cash want to take advantage of market bottom near Pacific coastlines."
"What’s not to like about arguably the country’s most desirable climate? Public-company homebuilders buy relatively cheap residential land to prepare for an eventual upturn. On the wobbly retail front, put a hold on any more lifestyle centers."
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