Why I Am Betting On Urban San Diego, Part III
by Jim Scott

For the past two months in this space I have been writing a series entitled "Why I Am Betting on Urban San Diego." I discussed the growth of the suburbs in San Diego and the shift of political power away from the land development community. Part III follows below.

The New Urban Buyer

Older close-in neighborhoods are back in favor. The New Urban Buyer used to live in Del Mar or in other upscale communities. Or they might have moved here from a large city and want an urban lifestyle. For whatever reasons, these affluent suburban buyers want to live close to or in downtown. Ten years ago they wanted North County Coastal or other similar areas. This qualitative and quantitative shift in demand is why prices in the 92103 zipcode have increased so dramatically in relation to the rest of the county. This is particularly true in the market for homes over $700,000.

There are about to 2,000 condominium units coming out of the ground in the 92103 and 92101 marketplace. The vast majority are in the latter area. This is a very large number and is truly a revolution in our traditional housing patterns. And it will bring sweeping changes to the Hillcrest and Mission Hills housing markets.

I am sure all of these units will sell easily and downtown will not suffer a vacancy problem in the rental market. The demand for row homes, lofts and other urban dwellings will only increase over time. As more people move in to the center city, services which used to be lacking in these neighborhoods will appear making the area more desirable. Because of their previous successes, developers will be emboldened to build more units. There does not seem to be anything in the cards to slow down this train which has surely left the station.

But this is good for Hillcrest and Mission Hills in so many ways. It will also benefit, to a lesser degree, North Park, Normal Heights and Golden Hill.

As the downtown population grows, there will be changes within each family. Children will be born and needs will change. As a result, in about three to five years we will see the beginnings of an out-migration of these New Urban Buyers to traditional homes and duplexes.

And where will they want to live? Affordability aside, my bet is they will all want to be in 92103. Those who cannot make the financial cut will filter out to the other urban areas noted above which will have the effect of improving life in the 92103 zipcode. A few will end up in the traditional suburbs but I am betting most will not want to give up on living close to our city core. In other words, the boom in the downtown housing market is creating future additional demand for close in single family homes. The success of downtown residential develop will create additional buyers for the 92103 zipcode. The result it that the area will outperform other affluent neighborhoods. I would bet on it.

You can reach Jim Scott at his office, conveniently located in the heart of Mission Hills, at 1111 Fort Stockton Drive. Scott & Quinn is the oldest full service real estate firm in Mission Hills and is still locally owned and operated. Jim has been a homeowner in Mission Hills since 1976. He is married and has two boys. He can be reached at 296-9511. Scott & Quinn features professional property management as well as a sales division.