An Upside to this Bubble Madness

My wife and I live in Pacific Beach, a beach community in San Diego that has (over the past 20 years or so) been an attractive locale for 20 somethings. The downside of living in such a community is that the main commerce stretch is primarily bars, tatoo parlors, and clothing stores, and there's a bit of noise, especially on the weekends and even moreso in the summer months. These "quality of life" things are no big deal when you're single and 24, but as you get older, settle down, plan on starting a family, you really question rather you want to raise kids in such a place.

There are two demographics that live in PB, for the most part - 20 somethings and elderly folks (60 years old+, people who, I imagine raised their families here back when PB was more of a family-oriented community). I saw a census data chart of PB from 2000 a couple years back that showed the population by age. There was a very small number of people aged 0-20, a huge spike of people from 20-30, virtually no one from 30-50, then a more subdued spike from 50-60 with a long tail from 60 onwards. Most people, as the data showed, move here in their 20s, have a blast, get married, want to start a family, and move out to the burbs or to La Jolla or to Bay Park or somewhere else, where the schools are better, there's fewer nightclubs, and less noise.

Since both my wife and I really like this community (save for those few "quality of life" issues I noted before), we've always pined for PB to grow with us. For those 20 somethings who used to move out, to stay with their young families. To turn this town, over the next 10-20 years, from one that caters to 20 somethings to one that caters to young families. To improve the schools. To make it quieter at night, to replace some of the bars and tatoo parlors with family-oriented shops - TCBYs and education toy stores, perhaps. :-)

But to achieve such change, you need people who are willing to be trailblazers, who are willing to stick it out in PB and affect change. We often worried that there would never be such a community of pioneers, or never enough, to affect change. However, we're starting to see more strollers out and about. More couples walking around with the wife pregnant. The only question is, Will they stay or will they flee to the burbs?

I'm leaning toward them staying, and not because of choice, but because of circumstance, because of the Bubble. Yes, back in 2000 when I first moved to PB, it seemed that most every 20 something rented (there aren't many standard apartment complexes here, per se, but many, many condos - it's a beach community, after all). That makes sense, what 23 year old buys a house? But with the real estate bubble, with easy credit, with everyone telling the 20 somethings out there, "Buy now or be priced out forever!" many bought. Being young and foolish and without enough life experience or money, many bought with zero down. Or with Interest Only Loans.

So now we have a bunch of homeowners. If the Bubble were still "on" they could just sell and move to the burbs, right? And that's likely what they'd do... IF the Bubble were still on. But it's no longer on. Inventory and DOM are skyrocketing; sales are plummeting. That $400,000 condo you bought two years ago when you got married is not moving for over $425,000. Whoops. So they stay, because they don't want to sell for a loss and, if they do, they can't afford to buy a place in the burbs. So just sit pat. Hope the adjustable mortgage doesn't go too high, and raise your family here. And while you're here, let's turn this town into a more family-friendly town.

Anecdotally, this transformation is starting to happen - I wonder if the bubble is helping this along as much as I'm assuming, or if that's just a pipe dream. Each time I walk the dog I see one or two strollers, whereas two years ago I would hardly see any. Right now there are two different babies crying that I can hear from my office. Two years ago, the couples in my complex or the neighboring one moved out before their babies were born, before they started their families. (In fact, I bought our condo from a couple where the wife was 6 months pregnant.)

This Bubble has and will cause a lot of pain, so I'm all for looking for any silver lining available... :-)