While job growth is the traditional driver of new home demand, the San Diego market recovery has been spurred on by primarily a dwindling of inventory, coupled with a continuation of government sponsored low interest rates. Analysts believe unsold inventory levels will remain relatively low for at least the next 12 to 18 months giving job growth in San Diego County an opportunity to rebound completely over the next few years. The increase in jobs is expected to give “new legs” to the current inventory depleted market rebound – giving us at least a three to five year upcycle.
Like many of the past housing market upcycles, overheated demand for subdivision land in the traditional location hotbeds, such as North Coastal San Diego County, have begun to spill over into communities located further east and inland – where there is a slightly greater number of available properties for sale.
SAN MARCOS SHOWING STRONG GROWTH
Available subdivision land in North San Diego County communities, especially San Marcos, is experiencing a significant increase in demand from builders. While we saw residential subdivision land typically trading for around $200,000 a finished lot in early 2012, we are now seeing in the first quarter of 2013 lots going as high as $285,000 a finished lot.
The finished lot value for residential subdivision land in San Marcos has increased in excess of 40% over the last year!
The City of San Marcos is undergoing significant upgrades with an expanding university town with over 14,000 full time students now at California State University at San Marcos (compared to just 9,722 students in 2011), the recent opening of the new “high technology” public high scool, and the remodel of San Marcos High School. The $180 million remodel project was one of the largest high school construction projects in the State of California and now boasts higher test scores than some of the public high schools located within the prestigious school districts situated along North Coastal San Diego County (south of Oceanside). Planned development of the approximately 1,000-unit University District mixed-use master plan beginning in 2014 (to be located near the CSU Campus and 78 Freeway) and the new linear mixed-use development plans running several blocks east and west (parallel to San Marcos Boulevard and the upscale Discovery Hills single family neighborhoods), will transform much of San Marcos beyond its “poor man’s Carlsbad” traditional reputation.
AREAS TO KEEP AN EYE ON
With the present market momentum continuing its course in the near term and moving towards complete restoration of the residential real estate values lost in San Diego County during the recession, Team San Diego sees the next generation of residential subdivision land opportunities in North San Diego County also migrating up the 15 Freeway (north of Escondido) to communities such as Bonsall (with outstanding schools) and the unincorporated Pala Mesa area (with the widening of Highway 76 / Mission Road – serving as a four lane expressway connecting Interstate 5 with Interstate 15).
Source: Bob McFarland, Marketing Consultant, (858) 568-7428 ext. 12