What makes a neighborhood hot? While buzz, nightlife and cool new housing may be good for residents, when it comes to investors, brokers and developers, what matters most is home value.
And San Diego continues to perform for investors, with the county’s median home price up 37 percent since 2010, from $385,000 to $527,000.
The South Park and Golden Hill area was the best performing ZIP code during that time span. Single-family-home prices were up a whopping 80 percent in 92102, an area bounded by Interstate 5 to the west, Imperial Avenue to the south and Euclid Avenue to the east.
In 2010, the median price for a home in 92102 was $215,000. Last year, that price was up to $387,000, and for the first half of 2016, it was $425,000. The price of attached homes (townhomes and condos) rose even more, from $135,000 to $260,000 — a jump of 93 percent since 2010.
It’s not just San Diego experiencing such jumps. California as a whole has seen fast price increases, up 56 percent to a median of $474,420 in 2015. Meanwhile, home prices nationwide have risen just 29 percent to a median of $223,900.
Our City analyzed year-end data from 2010 to 2015 from the Greater San Diego Association of Realtors. We winnowed down the data to look at ZIP codes that had more than 100 single-family-home sales or more than 50 attached-unit sales in 2015.
Overwhelmingly, areas southeast of downtown are the hottest markets, based on price appreciation. Of the 10 ZIP codes with the greatest price increases, half are contiguous ZIP codes making up Southeast San Diego. Just two North County ZIP codes were in the top 10.
It’s all about desirability and the basic fundamentals of supply and demand, said Anthony Andaya, 2016 president of the Pacific Southwest Association of Realtors.
“If you look at it at the macro level, these are some of the more affordable areas left in San Diego County,” said Andaya, a Realtor with Coldwell Banker. “There’s a larger pool of buyers looking in these areas.”
As more people buy in the areas near metro San Diego — from Golden Hill to National City — they become more in demand and prices shoot up.
“You have to keep in mind, a lot of the homes here are older,” Andaya said. “Where there were areas of affordability, investors could come in and rehab a lot of the properties. They drove the market up, and then new businesses started coming in. That critical mass leads to a much higher increase in value compared to other neighborhoods.”
South Park has been a favorite for investors and old home enthusiasts who want to fix up turn-of-the-century houses. The neighborhood hosts a quarterly walkabout, designed to highlight its eclectic shops and restaurants. It is also home to the annual Old House Fair, which celebrates historical residences. Many of the houses in South Park date back to the early 1900s.
Golden Hill, which is just south of South Park, was developed about the same time and offers renovators the same opportunities. Grant Hill, which is a 10-block neighborhood just south of Golden Hill, is another up-and-coming market. It includes families who have been there for generations, as well as newcomers.
Just south of 92102 is the 92113 ZIP code, which boasts a 78 percent appreciation in its median single-family-home price since 2010. The area includes Barrio Logan, Logan Heights, Mountain View and Lincoln Park. Attached properties there have nearly doubled in price, from $91,250 to $172,500.
The area’s demographics began changing years earlier. The percentage of residents who are Hispanic dropped from 86 percent in 2000 to 72 percent in 2010, and the white population grew from 6 percent to 16 percent. The median annual income rose 30 percent in that decade to $26,761.
Barrio Logan took a beating in the 1950s and 1960s, with the expansion of Naval Base San Diego, and the addition of Interstate 5 and the Coronado Bridge. New development, including Petco Park and the $80 million Mercado del Barrio mixed-use project, is helping the traditionally Hispanic neighborhood make a comeback.
“I think people are attracted to the uniqueness of the area and the fantastic public transportation, as well as the proximity to downtown without having to pay the high price tag,” said David Alvarez, a San Diego City Council member who grew up in Barrio Logan.
Farther south is National City, where sale prices of single-family homes are up 55 percent in five years, from $220,000 to $340,000. With just 7.3 square miles of land, National City has the county’s highest density. Half of all households earn $40,000 or less.
To the east, East San Diego (92105) and Encanto (92114) also saw high levels of appreciation — 53 percent and 47 percent, respectively. Meanwhile, Imperial Beach (91932) sat right in the middle with a 50 percent appreciation.
Imperial Beach is in the midst of its own renaissance, said Andaya.
“They are one of the last coastal communities that’s affordable,” he said, noting that may not last forever. “They’ve also had some great leadership, a lot of new businesses, like the hotel and eateries. Everything is just changing for the better.”
In 2010, the starting point of our five-year analysis, there were still quite a few bank-owned properties and short sales all across San Diego County. By 2012, San Diego was seeing a more normal market, which wasn’t inundated with foreclosed homes. Investors had already snatched up most of those at low prices, and regular buyers and sellers began returning to the market.
aHomes throughout the county are selling faster now, being on the market for an average of 40 days, compared to 75 days back in 2010. And that’s an indicator that home prices will continue to rise.