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Comparing Housing Markets: San Diego

SCOTT HORSLEY reporting:

And I'm Scott Horsley in San Diego, which Money magazine has just dubbed `America's scariest housing market.' Home prices here have more than doubled in the last five years, and only about one family in nine can afford the typical home.

I'm here at a real estate office. This happens to be next to my supermarket. I often stop buy and look at some of the nice pictures you have in the window here, and I'm here with Xavier McDonald(ph).

And tell me about some of these homes y'all have listed. This is a nice one here, City Heights, two-bedroom, one bath.

Mr. XAVIER McDONALD (Real Estate Agent): And the price on this home is 385. It would be considered kind of a starter property in that price range. It's kind of hard to find something in that range in San Diego at all, a single-family detached home.

HORSLEY: This is a very nice house here in Normal Heights, three bedrooms, two baths, 1,330 square feet.

Mr. McDONALD: Yes, and that one has a price range of $665,000 to $725,000. And it's at Harley Boulevard(ph).

(Soundbite of Horsley whistling and McDonald chuckling)

Mr. McDONALD: Yeah, that's--and that is in an OK area. It's kind of in-the-city living and it does have a nice fence around it and it has a private, nice, lush backyard.

HORSLEY: Now the national median just in the newspaper of $206,000--what could I get for $206,000?

Mr. McDONALD: You could not get any kind of a single-family home for $206,000. You could get a--you're lucky really--I guess you could get a one-bedroom condo for that price.

(Soundbite of door opening)

HORSLEY: After talking with Xavier, I visited a one-bedroom condominium in the central part of San Diego. And I'm here with Cynthia Peterson, the sales manager.

Ms. CYNTHIA PETERSON (Condo Sales Manager): Hi.

HORSLEY: This is being offered in what you call a value range.

Ms. PETERSON: Correct, and that's--this unit is 199 to 210.

HORSLEY: And this is a--What is it?--560 square feet?

Ms. PETERSON: Yes. It's definitely cozy but for a lot of, like, single professionals, they feel happy and comfortable here.

HORSLEY: One thing about a smaller place, you don't wind up spending a lot of money on furniture.

Ms. PETERSON: That's for sure, yeah. You don't want to have a lot of clutter around so--yeah, I find a lot of people when they're moving in are, you know, using the dumpsters to throw stuff. Really it makes you value your space and do-I-really-want-to-keep-this sort of mentality, so that's good.

HORSLEY: This is one unit out of seven in the complex. How are they selling?

Ms. PETERSON: Well, they're all sold except for this one, so they're selling great.

HORSLEY: A condo might be more affordable, but suppose you're determined to have a single-family house. Here on the outskirts of San Diego, about 20 miles from town, I did find one--three bedrooms, two baths--for the remarkable price of just under $208,000. But there's a catch. That price does not include the land. So in addition to your mortgage, you also have a monthly lease payment of $620. Still, a man's home is his castle, even if someone else owns the ground underneath it.

Scott Horsley, NPR News, San Diego.



MONTAGNE: I'm Renee Montagne. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.