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Pressure builds on San Diego

I can assure you that the immigration into this region will continue. Nationally televised football games feature Mother Nature as much as any visiting team; she was marvelous, wasn't she? I spoke to my kids in Colorado and Oregon, family in New Jersey and Florida, and clients and contacts all over the earth and found that San Diego's reputation as America's most blessed climate was enhanced. Even locals were appreciative of how smart they were to have been born here, moved here, gone to school here, etc.

The real estate implications are: 1) the supply of housing will become even more distant from the demand, ensuring that the only bubble would be that of champagne corks popping off the bubbly as brokers and sellers rejoice at least one more calendar movement; 2) the finite supply of useable land would continue its critical shortage for all residential uses; 3) the inner cities would attract second and third looks for builder activities, some in partnership with local communities; 4) that our critical shortage for infrastructure would become worse as state and federal budgets were cut by growing deficits.

While this has remained a jobless growth "recovery," brokers and lenders are confident that new service jobs will lead the ensuing rebound. This will add to the vibrancy of the downtown office market, where demand for land is at its most sustained, spreading eastward and southward, in addition to our "Sili-clone"/Sorrento Valley, along with the UCSD-influenced UTC/La Jolla areas. Lenders will watch the lack of business confidence in recovery as they try greater selectivity among developers of new projects. Brokers will continue to consolidate as they reach for the national and overseas regions. This is their greatest period of expansion, ending with the greatest layoffs as technology and higher interest rates attack the expansion mode.

Immigrants and moderate-earning families will either have to move, remain in place praying that rents are not increased, or double up with other elements of family generations. I see very little new supply of rental apartments coming into the market, rather, more conversions into for-sale places. Even "grade B and C" apartments are hot commodities, selling for far more than their owners ever dreamed -- further ensuring that rents will not dive.

This will be known as the month of uncertainty as talking heads populate every station telling why we will, won't, can't, should or shouldn't have war by this spring -- as if it were a new parlor game, which it is not.

Gasoline prices expand while mothers of soldiers pray to a kind God that their children are spared. Peaceniks walk for no-war as their emotional violence against their own government expands beyond talk. The stock market simply reflects the uncertainty of the war-talk and the weak economy -- driving up the price of gold, along with fuel.

Income will be the operating word in commercial real estate as both the short- and long-term demand it will or will not invest. The sophistication in the world of funds renders them more patient than my 45-plus years of experience in real estate has witnessed.

This means more marking time before investing, as well as focus on valid income possible from any purchase. Economists are worried about the total debt that consumers, business and countries have, to which this administration pays little attention in their forecasts.

As winter wends its way to springtime, I see more thawing of Mother Nature as well as the economy, as it is suspended between debt and opportunity for cash flow -- casting its eyes on real estate -- but wary about pricing and insurance.

Goodkin has been a business ethicist and housing analyst since 1956. He may be reached at sanford.goodkin@sddt.com.

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