After our first 10 weekly HousingWire columns looked at predicted real estate appreciation in Metropolitan Statistical Areas in the Northeast, Northwest, Southeast, Southwest and Midwest, we now check in with the West and the nation's most populous state.
In the March 2018 VeroFORECAST from Veros Real Estate Solutions, which forecasts changing property values through March 2019 in 342 of the more than 360 MSAs in the United States, California's San Diego-Carlsbad-San Marcos MSA was ranked 20th with a projected rate of 8.3% appreciation over the next 12 months.
Coincidentally, that is the same percentage of California's population that lives in America's most southwestern MSA. According to a U.S. Census Bureau estimate, 39,536,653 people lived in the Golden State in 2017 and more than 3.3 million of them call the San Diego-Carlsbad-San Marcos MSA home. That makes it California's fourth largest and the nation's 17th largest.
INVESTING IN QUALITY OF LIFE
Many things contribute to this coastal California MSA. In addition to its near-monotonous temperate climate, improving economy, point-of-entry position for tourists and immigrants from Latin and South America as well as Asia, the huge Marine and Naval installations that are again benefiting from increased military spending, it has a quality of life that continues to attract homebuyers and push home prices higher.
"San Diego County continues to be a highly desirable place to live. Especially the coastal towns of North County, anchored by Carlsbad, offer the best of all worlds; beautiful beaches, quaint shopping, excellent schools and relatively affordable housing," said mellohome CEO and San Diego-based The Heller Real Estate Group owner Chris Heller.
One prominent aspect behind the San Diego-Carlsbad market's real estate appreciation is a municipal-promotion of arts and culture appreciation. San Diego boasts one of the nation's finest arts and culture resources with its Balboa Park. It not only includes a nationally respected three-theater complex, the Old Globe, but museums, a space center, and wide expanses of lawn where art shows and other community events are routinely held.
In Carlsbad to the north, a well-staffed cultural arts office is about to launch a 10-year plan of investing in ways to stimulate and promote both the creation and appreciation of art and culture. A key part of this yearlong process has been gathering community input, and empowering homeowners and other residents the responsibility to buy in to the process.
“It’s imperative to hear what community members enjoy,” Cultural Arts Manager Richard Schultz told local media.
That community buy-in is clearly part of why people will continue to buy in these areas. While not unique among the 342 metro areas included in the VeroFORECAST report, this focus is certainly as strong and valuable to future quality of life than anywhere in the country.
Those 342 MSAs represent nearly 1,000 counties and over 13,600 ZIP codes. The SFRs, condos and townhouses in these MSAs are occupied by more than 80% of the U.S. population. The range of projected appreciation in the March 2018 VeroFORECAST runs from a high of 11% in the Northwest's Seattle metro to a low of -2.9% along the Eastern Seaboard in the Atlantic City metro.
The key indicators used to determine the projected score include each MSA's inflation and interest rates, the amount of its buildable land, and its affordability index, as well as the current unemployment rate and available housing inventory.
The chief factors contributing to the high rate of projected appreciation for the San Diego MSA are a low unemployment rate of only 3.5% and a supply of housing at just over two months. Robust population growth also gives this market good expected appreciation. A report from the U.S. Department of Commerce's Bureau of Economic Analysis put this MSA's 2016 per capita personal income at $55,168, 30th among the country's MSAs and 22% higher than the average in California's three-dozen MSAs, which is $45,399.