La Jolla, a neighborhood of San Diego, is characterized by being slightly more upscale and pricey than the rest of California's second largest city. La Jolla has had a somewhat more difficult time than the city at large in terms of recovering from the nationwide economic recession. The more widespread recovery that has, according to most experts, been gradually reviving the San Diego area, has not had as much of an effect on the upscale houses of the La Jolla region. According to Sandicor, a San Diego Real Estate Statistics and Services company, while the greater San Diego area experienced a sales increase of about 50%, the La Jolla neighborhood of the city saw a decrease of between 14% and 20%, depending on what portion of the market is being considered.
Realtor Bob Casagrand theorized that the problem with the La Jolla real estate market is an excessive amount of supply. In his own words, “This imbalance between supply and demand will create negative price pressures in the La Jolla market.” According to a July 15, 2009 article published by The Street, overall home sales in Southern California have reached their highest levels since the year 2006. The article continued to describe the fact that there are an increased number of homes priced above a half million dollars on the market, a succinct juxtaposition of the overall state of the California market and the particular situation of La Jolla real estate - general improvement as opposed to high-end problem areas.
The commercial segment of the La Jolla real estate market is also suffering the effects of the nationwide crunch - an article published in SanDiego.com reported that La Jolla has the second highest prices for commercial leases in the entirety of the region - a problem in a cost-conscious economy. La Jolla real estate has a much higher average price than the rest of San Diego - a whopping $1,912,564, which in itself is a decrease of almost half a million dollars from last year, according to MLS Statistics. One probable reason why La Jolla has not recovered is because the eight thousand dollar a year tax credit is not enough to help first time home buyers purchase an expensive La Jolla property.