San Diego Home Values Near $600 billion
The total value of homes in San Diego County reached $596 billion in 2016, up 6 percent from the year before, said a study by real estate website Zillow. It follows a national trend of increasing home values, rising 5.7 percent in the same time period.
Aaron Terrazas, senior economist at Zillow, said looking at home value alone doesn’t tell the whole story — such as, how income growth compares — but it allows analysts to see a larger picture.
“The total home value of San Diego (County) is more than the GDP of Argentina,” he said.
San Diego County did not reach its peak of $603 billion from 2005, but Terrazas said the region will surpass it next year.
With the caveat that home values are, in part, reflective of population sizes, Los Angeles had the most valuable homes in 2016, worth $2.5 trillion. It was followed by New York at $2.4 trillion; San Francisco, $1.3 trillion; and Washington, D.C., $975.1 billion, Zillow said.
San Diego County had the ninth most valuable homes, higher than Philadelphia, Seattle, Dallas, Denver, Portland, Atlanta and many other large cities.
Indianapolis had the lowest home values of the 35 major cities studied at $111.7 billion.
Chris Thornberg, founding partner of Beacon Economics, said high home values are good because they can be stimulative for a regional economy, but what’s happening in San Diego has a down side.
“Wealth is being generated by artificial constraints on the market,” he said. “Total wealth would go up more if more housing was built.”
He said high prices hurt the ability of local businesses to recruit, which can hurt the economy.
Thornberg said California home price increases are disproportionate to one half of the population. He said the rise in values during the housing boom was more in inland areas where first-time homeowners were getting the chance to buy, but now the major increases are in affluent areas where current owners’ homes continue to jump in value.
San Diego metro home values were $234 billion in 1998, reaching $296 billion in 2000 and peaking in 2005. In the midst of the recession, home values dropped sharply — hitting $404 billion in 2011. Home values were still $7 billion shy of the 2005 peak this year.
Meanwhile, Zillow estimates San Diego County renters spent $9.6 billion in rent in 2016, up 8 percent from 2015. New York residents paid the most, $54.6 billion, and Cleveland residents paid the least, $2.3 billion.