The Rise of the Luxury Real Estate Market in San Diego & Beyond
The real estate market has been making a steady comeback since the recession of 2008-a macro level economic downfall that impacted the real estate industry greatly. Not only has there been a rise in the mid-level real estate market but there has also been a rise in the luxury real estate market across the globe, as well.
More specifically, San Diego has experienced an active growth in the luxury real estate market which can be a reflection of the health of the overall housing market in S.D., too.
One inclination for the recent rise of the luxury home market would be the new wave of home buyers that are millennial entrepreneurs. These luxury home buyers are a product of the booming tech industry and globalized online market. As Luxury Defined puts it, “The health and pricing of luxury real estate markets are not always internationally fueled; the spending habits of local entrepreneurs also have an influence.” They add that the local entrepreneurs buying luxury homes are increasingly being made up of the millennial entrepreneurs known as ‘millennipreneurs’, a term coined by Scorpio Partnership and BPN Paribas.
According to an article written by Harold Clarke for the CNBC Money, these luxury home buyers are looking for homes with a generous bedroom count, minimalist style, and unobstructed views, and most importantly, location.
San Diego has long been a desired location among luxury real estate buyers due to its proximity to the beach, the weather, the culture and a variety of other attributes. And San Diego’s luxury real estate market is predicted to continue to rise.
According to a recent article written by Phillip Molnar for Union Tribune titled ‘San Diego luxury housing could see a boost under tax plan’, the San Diego luxury housing market is expected to jump even more due to a new tax plan that passed during a vote on December 20th . To put it in simple terms, the tax plan would reduce the corporate tax rate meaning people with investments in multiple companies will now have extra money to spend. The tax plan would also, “…reduce mortgage interest deduction on new loans up to $750,000, down from $1 million,” Molnar adds.
The rise of the San Diego luxury market is also a reflection of the overall health of the San Diego housing market. In June of 2017, Voice of San Diego reported that the median San Diego home price has exceeded the prior bubble peak but that experts are not concerned that the city is entering a new housing bubble. That is good news for the San Diego real estate market since agents and investors are optimistic and are currently experiencing an active market. Avoiding the housing bubble is important to avoiding another financial pitfall, like the one in 2008. In the article titled, ‘There’s Still No San Diego Housing Bubble Yet’ by Rich Toscano for Voice of San Diego, he writes, “San Diego homes are expensive, for sure — the priciest, compared with rents and incomes, that they’ve ever been outside of the bubble era…But the housing market exhibits neither the valuation nor the behavioral characteristics of a true bubble.”