The national economy keeps growing and by at least one measure, San Diego is the nation’s No. 1 boom town.
The San Diego area turned in the best performance in U.S. personal income growth, according to data released this week by the Census Bureau.
Median household income in San Diego increased to $76,207, jumping 5.4 percent and finishing No. 1 among 50 metropolitan areas studied.
Christopher Thornberg, founding partner at Beacon Economics, a Los Angeles-based research firm, said the big drivers for San Diego were “military, tourism and tech — the big three. And all three are doing great right now.”
California cities set the pace in the census figures, with five metro areas finishing in the top 10.
San Diego edged past the Silicon Valley for the top spot in the Golden State. The median income in the San Jose-Sunnyvale-Santa Clara area posted a 4.6 percent gain last year, rising to $117,474.
The Inland Empire that includes Riverside, Ontario and San Bernardino recorded personal income growth of 4.3 percent — the sixth highest in the country and the third-highest in California.
Last year, California’s economy grew 3 percent and made headlines by moving past the United Kingdom to become the fifth-largest economy in the world.
While San Diego’s top ranking may come as somewhat of a surprise, it is emblematic of the continued strength of California’s economy, helped along by a very low jobless rate, said Mark Cafferty, president of the San Diego Regional Economic Development Corporation.
“Historically, wages in the Bay Area and L.A. have been higher but now, as San Diego’s economy is growing and tech jobs are growing, you have talented people who companies are trying to keep or attract, so it makes sense wages are going up,” he said.
The latest census numbers are a great talking point, Cafferty said, for an organization like the EDC to “counter several years of seeing wages in other metro areas outpace San Diego.”
Nationally, median household income rose 2.6 percent. Richmond, Virginia, finished second to San Diego, experiencing 5.3 percent growth.
“The general numbers reflect the growing numbers of the economy,” Thornberg said. “This is not particularly new since the U.S. economy has been in steady growth for about seven years now … It’s probably not too much of a surprise because of the tightness of the labor market we’ve seen over the last few years.”
In many ways, San Diego has been Exhibit A in the booming economy.
Unemployment in the area was 3.5 percent in July, compared to 4.1 percent nationally and 4.4 percent in California.
But while wages are rising, so is the cost of housing.
San Diego County’s median home price in July hit $579,750, the highest price in the area’s history. At the same time, sales hit a four-year low, according to real estate tracker CoreLogic.
The previous record was $575,000, set in May. Home prices have been breaking records on nearly a month-to-month basis all year.
“You have a situation where the population refuses to allow the housing stock to expand at an appropriate rate,” Thornberg said. “As a result, home prices are rising more and more, rents are going up and you have a gentrification effect. You have higher income people moving into the state and they are more or less driving lower income people out.”
Cafferty echoed those sentiments.
“We need to not celebrate (the No. 1 ranking) too much because we have to deal with some of the issues that make it unsustainable to live in the region because of the high housing costs,” he said. “As we're doing work at the local level, we have to think about ways to make San Diego more affordable, because if the cost of living continues to skyrocket and we only keep increasing wages, that won't be sustainable for businesses.”
Staff writer Lori Weisberg contributed to this story.