What does SANDAG's 35-year plan mean for San Diego
what does sandag's 35-year plan mean for san diego real estate prices?
just last month the san diego association of government (sandag) released a blueprint of san diego's future called 'san diego forward: the regional plan'. it entails the vision for san diego for the next 35 years with the goal of developing 'vibrant, healthy communities'. todd gloria, council member on the sandag, s it as a 'critical document' that will guide san diego's future and its development.
in part, the 35-year plan projects a density and population growth in san diego county. the agency anticipates that san diego county will add an additional 1 million to its population forecasting 489,000 more jobs and 330,000 more housing units by 2050.
in the past, trends have shown that an influx of more people to an area creates a higher demand for housing. typically, higher demand in turn pushes property prices up both in appreciation as well as in rental value. the reason is simple: more people need accommodation and are willing to pay more for it. with strong and long-lasting population growth development and construction occurs to cope with the demand.
research by protek valuation services showed that property values correspond with population growth. one such example of a city that supports the link of population increase and home value increase is austin, texas. the city experienced an influx of population when technology and internet companies like dell, facebook and google moved into the city. property prices increased steadily over time showing an all-time high in appreciation for the city. more interestingly, there was not much impact on home values during the home crisis of 2008. therefore, it can be said that home values parallel a healthy population and job growth and in such we should expect our home prices to climb.
according to cbre, a trusted source for rental data, rent is averaging $1,756 per month in san diego county. downtown san diego has the highest rent of all areas in san diego with $2,048 average monthly rent. an increase in jobs and population is anticipated to increase rental values making the san diego real estate market even more appealing and lucrative for investors. cbre projects an increase of at least 3% every year for the next three years in rents.
sandag further plans to invest $200 billion into infrastructure and thereby connecting communities with each other creating an urban feel. surveys have shown that millennials are looking for that urban feel when it comes to home buying which will only enhance the appeal to buy and invest in san diego.
renters should think twice before renewing their lease for another year because in a city like san diego that thinks 'forward' home prices will only know one way to go and that will be up!
melania mirzakhanian, broker
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