Earlier we looked at the basic advantages of all income property and the specific benefits that come from San Diego apartment’s supply and demand.
What happened to Detroit when the automotive industry slid? Las Vegas led the national foreclosure rate for years. In contrast, San Diego’s biggest for profit employer, Qualcomm, does not have 1% of the jobs in our county. That diversification is amazingly rare. Many cities have three economic drivers, where they are net exporters to the rest of the world. San Diego has eight drivers.
1. Military: largest military base on the globe
2. Education: Four major universities and more than a score junior colleges and institutes
3. Tourism: beaches, vacations, cruise ships and climate
4. BioTech and software
5. Manufacturing Golf, TV components, drones.
6. Retail: thousands of people cross the border daily with fresh purchases
7. Agriculture: you may not see it much but we export more than we bring in
8. Import/Export
Diversification is important because when one sector is weak another can supplement it. In the last three recessions San Diego has fared better than the rest of Southern California. Our job losses were less and our recovery was faster.
When your clients are renters, among the younger and lower paid workers, economic diversity is vital. Diversification means deflecting the damage that destroys others. Next we will consider how the existing housing stock almost guarantees appreciation for long term investors. It’s true!