Earlier today, reader ‘socalbuyer’ asked,
Word on the street is that Qualcomm is going to layoff a couple thousand folks in San Diego this year. Wanted to get your thoughts on how that would affect the real estate market in San Diego. Most of those jobs may not find a fit in San Diego, and a bunch of Qcomers probably don’t need to sell.
It should mean an instant 10% decline in prices around Carmel Valley because buyers will expect some insurance. Sellers will reluctantly agree because they probably made that much in appreciation over the last year.
After that, it will get interesting.
The unemployed will shine up their resume and hunt for a new job for a year (or more) before ‘giving it away’. Spouse and kids won’t surrender easily either.
This is what we can expect from any disaster, natural or otherwise, that shocks the system. Buyers will be prone to hesitate, and the sellers who feel somewhat panicked will accommodate by lowering their price to clinch a sale.
Real estate isn’t known to be a liquid asset, so everyone will adjust expectations after the initial pop.
My understanding is that we have a total of 9000+ property sale transactions a year in San Diego…the qcom layoff number is as high as 5000. Figure 50% find a job out of San Diego and need to sell, 2500 units on the market sounds sizable, especially if most are in 92130.
Last year there were 22,079 detached homes sold in San Diego County, and 470 in the 92130 – which is only 39 per month. If pricing retreated a little, there could be a surge of CV buying but either way, it is a small portion of the market compared to the overall county. I’m guessing that there is enough underlying demand that any excess properties will get soaked up – it’s just a matter of price.
Carmel Valley prices have gone up 20% in the last 2-3 years. If sellers had to give that much back, they’d survive. The market will too – CV has too much going for it.