How LA buyers are propping up San Diego's housing market
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Could house an LA resident soon. Photo: Claire Trageser/Axios
The answer to who can possibly afford to buy a home in San Diego might be outsiders — specifically, people from Los Angeles.
Why it matters: Angelinos, with their higher incomes and larger equities, are buying up homes in San Diego, contributing to local high prices, according to data from Redfin and Zillow and real estate experts.
- "I would say that our real estate is wildly being propped up by the LA buyer," real estate agent Seth O'Byrne told Axios. "I think if we didn't have the LA buyers coming down here, our real estate market wouldn't be as strong as it is."
How it works: Los Angeles residents can sell their homes for more and use that equity to buy bigger properties in San Diego.
- O'Byrne said he's worked with multiple LA buyers who are thrilled to see what they can get in San Diego's priciest neighborhoods, like Rancho Santa Fe.
- "I have a home for sale right now for $5.5 million in The Ranch and almost everybody looking to buy it is from LA," he said. "People come down and go, 'Wait, I can get 6,000 square feet on 5 acres for $6 million? Are you kidding me?' Because in LA, $6 million is buying you something in West Hollywood that was some old 1920s house."
By the numbers: LA homebuyers are looking to move into San Diego more than any other metro, ahead of Raleigh and San Francisco, according to data from Redfin.
- In the past year, the net inflow to San Diego from LA was 2,048 people, meaning the number of searchers looking to move in minus the searchers looking to move out.
- San Francisco was second with 1,171 people and Washington, D.C., was a distant third, with 274 people.
- Zillow shows a similar trend, with 11.7% of San Diego home searchers from LA, well above 3.8% from Riverside and 2.3% from San Francisco.
Caveat: This data is only about who searched for houses in San Diego, not who bought them.
- The California Association of Realtors and San Diego Association of Realtors said they don't keep data on where people are moving from.
State of play: The trend is evident to O'Byrne, who said he doesn't see it stopping any time soon.
- "Since LA is such a larger city than San Diego, I think we have millions of LA buyers that will come down here in the next couple of years," he said. "If we weren't a market that had so much LA interest, I don't think we'd be seeing these prices remain so solid, because LA sees us like we're on sale."
Friction point: That's good news for Realtors like him but bad news to home buyers.
- San Diego already has limited homes for sale, high prices, historically low sales, and low turnover rates as owners stay put.