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EconoMeter: Is there a housing bubble?

Rising prices and multiple offers implies a runaway market is developing

Roger Showley, U-T SAN DIEGO

Friday, June 7, 2013

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Kelly Cunningham, National University System
Answer: Yes

With the ratio of the region’s housing price to household income spiking, San Diego’s housing market seems headed into bubble territory again. Continuing as one of the nation’s least affordable housing markets because of this ratio, San Diego home prices are not so much driven by organic consumer demand but by investors speculating on prices further rising. At the same time the inventory of available housing diminishes, with relatively little new construction in the pipeline adding to supply. Pressures are mounting to drive prices further upward to where workers will be unable to purchase or even afford to rent homes.