Real Estate & Area News

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San Diego is one of seven housing markets across the US that are entering bubble territory, according to Norm Miller, a professor at the University of San Diego's School of Business Administration. In his research, Miller determined that San Diego, Denver, Miami, Portland and several Bay Area communities are showing signs of being in a bubble. "When the next recession hits, prices could decline in the 'San' markets, including San Francisco, San Rafael and San Diego," Miller noted. "Less a real estate bubble, this is more of a 'tech bubble' that will affect some real estate markets when the stock prices dip significantly."

In compiling his research, Miller investigated some 20,000 zip codes across the country. "When home prices collapse, they do not do this evenly across a metro level, so it's important not to focus too much on averages," Miller explained. "Those neighborhoods with the least equity or highest loan-to-value ratios tend to also be the most volatile." Miller said that some factors that can spark localized bubbles are high demand for housing in coastal regions with limited inventory and a widespread dependence on low interest rates.

August 18, 2015