S&P Case Schiller Homes Prices - Update on Housing 2017…
San Diego’s Real Estate Market
It’s hard not to proclaim San Diego as the most preferred destination for business and leisure. In fact it’s commonly rated in the top ten for both in the US. But is San Diego actually keeping pace or are the numbers slightly delusional? Is your startup or business venture in SD following the right developmental path to profitability or is the correct one involve partnerships?
The key question is whether San Diego business owners are thinking creatively enough to give them the strategic leverage to outcompete and outmaneuver wealthier and more connected competition in Silicon Valley, LA and Boston?
California was just named the 5th largest economy in the world and it’s had a great year in 2016. That’s amazing, but does San Diego’s small business and startup growth compare to that of LA and silicon valley? Some of the data below suggests that despite growth in manufacturing and professional services, talented workers may not want to move to SD county. With the Trump presidency firmly launched, San Diego, San Francisco and Los Angeles may be headed for boom times.
Source: Wallet Hub
Is San Diego a Startup Heaven?
Forbes published their top cities for startups report and they chose San Diego as the best place to launch a new business. You probably wouldn’t get too much argument that a medical and security software startup would thrive here, but is SD better than silicon valley at anything else? Blair Giesen of Thevoiceofsandiego.com is a little skeptical that investors are here and that San Diego is a tech hub. But don’t tell that to San Diego Startup Week who just had their 5 day convention. And conventions are one big advantage San Diego does have.
Which industries are best for startup businesses?
Team Up with the Right Partners
Should San Diego Chamber of Commerce and San Diego Regional Economic Development be doing more? Although some startups have found success, it isn’t easy to succeed especially in digital marketing against tough competition. Companies would be wise to get connected with companies and investors in other cities, perhaps Canada or the UK to build a wider base of success. By networking and accessing those components that don’t and never will exist in San Diego, SD might be able to compete equally with LA, NY, Boston and Silicon Valley. What shouldn’t be underestimated is the desire of companies in Vancouver or Toronto or London to work with SD companies. Motivation is a key factor in performance.
San Diego’s wonderful leisure climate and opportunities are a powerful draw to bring smart talent, business entrepreneurs, and investors from around the world. All that’s needed are people who believe in San Diego!
Check out SDEDC’s downloadable infographic of the current economic stats (June 2016)
Should SD be Leveraging the 4 Pillars instead of Leaning on Them?
San Diego has 4 key industries including maritime/naval, healthcare, tourism, and research.
Although US naval fleets and operations are the biggest engine of business and tax revenue in San Diego, the future of war doesn’t look good. If defense budgets stay at current levels, that’s fine, but San Diego needs to grow and diversify to generate greater opportunity, investment and of course jobs.
According to dot.ca.gov, in 2012, most employment sectors in San Diego enjoyed job growth. And the city’s current 4.2% jobless rate is extraordinary. Most cities can only dream of that. The largest gains occurred in professional services (+5,700 jobs), leisure and hospitality (+5,400 jobs), and retail and wholesale trade (+4,500 jobs), and education and healthcare (+4,300 jobs). The only sector that lost jobs was government (-1,400 jobs).
It’s expected that from 2013 to 2018, growth will average 1.9 % per year and the fastest rates of growth will occur in information and professional and business services with annual rates of 3.8% and 2.9%
Compare SD’s per capital income growth to San Francisco’s pictured here at right, and you can expect more skilled, creative talented IT related workers to choose Palo Alto and Mountainview rather than San Diego to work and live. But for startups, it might be better to stick to Toronto (see Entrepreneur.com’s vote), Vancouver or Charlotte. Boston, LA, San Francisco, and Silicon Valley are expensive. And Sergei Brin of Google agrees.
Don’t launch your startup in Silicon Valley. During the boom cycles, the expectations around the costs – real estate, salaries – the expectations people and employees have … it can be hard to make a scrappy initial business that’s self-sustaining. Silicon Valley is good for scaling that opportunity, providing more capital and allowing more risk.” — Sergei Brin stated at the Global Entrepreneurship Summit June 27, 2016
From 2016 to 2020, SD’s population will grow about 180,000 and per capita income will grow about $4,000 to an average of $58,428. The professional services sector will see the strongest job growth in total of more than 20,000 new jobs.
And in this graphic at right, we discover that per capita income will rise much faster than the California average (other CA counties will do much better).
High wages in San Francisco, Palo Alto, Mountainview, Santa Clara, San Jose will draw high skilled IT workers like flies. However the Bay Area is pricey and the cost of doing business there will eat away at capital and profits. Silicon Valley looks to India for alleys but Donald Trump might throw a monkey wrench into their machine.
REAL ESTATE: High volumes of sales and soaring home prices indicate that compared to the rest of the nation, California metros are benefitting from strong housing sector growth in 2013. San Francisco is considered by some to be the strongest market in the country, closely followed by several other California metros including San Jose, Sacramento, Orange, and San Joaquin Counties.
Looking to Canada for Business and Marketing Partners
San Diego has a lot of potential, but the lack of sector diversity and being a small market makes it tough. Aligning with Toronto or Vancouver based companies is one very smart avenue for SD County businesses. Canadian companies are hungry for International opportunities and it might be wise for you to team up with a Canadian firm whose skills and services makes sense.
Canada’s Business Development Corporation offers financing and grants for Canadian businesses who want to export. This kind of financing can make sense when small Canadian IT companies have networking and business arrangements with US or UK companies. China’s rapidly growing middle class and high rate growth is a superb export market too. Vancouver businesses have excellent connections to Chinese investors and businesses.
Combine these financial resources with those US small business grants if you’re at the launching point.
It takes a lot to make a successful small business. You need the intellectual, creative, marketing and financing capital to build an unbeatable edge. Why go it alone with dreams, when you can network and partner with companies that complement and power up your businesses unique value proposition for a piece of the International business pie?
Where will you find San Francisco apartments for rent? Are you looking for the best cities to invest in real estate in 2017? Where is the best Vacation destination: Costa Rica or San Diego? Is tlhe right time to sell your home? Reports suggest people don’t intend to sell their homes so what impact will that have on the US housing construction forecast? How will first time buyers ever get the mortgage financing they need to buy?