Hey friends! I've gotten asked a few times this week about our market here in San Diego, when a shift may be coming, and if we are in a bubble. While no one can predict the future with 100% certainty, we can definitely explore what's going on and try to get a read on where we're going.
First, let's talk about "bubbles." Bubbles in real estate are characterized by two main features:
1. Values: Prices become exceptionally high compared to other market indicators (like rent). Prices rise extremely quickly.
2. Psychology: Investors are optimistic to the point of euphoria and are dismissive of risk. They feel invincible!