New car sales in San Diego may be sign of economic turnaround

New car sales in 2012 up 27 percent from 2011

SAN DIEGO -  

In a possible sign San Diego's economy may be turning around, local auto dealers say they have not seen new car sales this high since 2007.
 
10News learned San Diego auto dealers sold 123,680 new cars in 2012 -- up 27 percent from 2011 and more than double the expectations. The hottest seller was the Toyota Prius.
 
"It does show somewhat of an increase in consumer attitudes," said Point Loma Nazarene University business professor Randy Ataide. 
 
Ataide warns new car sales alone are not an accurate economic indicator.
 
"That is not something that could just be taken at face value, there's more to that story," Ataide said.
 
Real estate, considered a better indicator, may be behind some people's decision to buy new cars, according to Ataide.
 
"Many people feel more wealthy when their home prices are stable or growing," said Ataide.
 
In fact, the media price of a single-family home in San Diego County increased 18 percent in December 2012 over December 2011.
 
Additionally, San Diego unemployment also dropped from 8.4 percent in November to 8.1 in December.
 
But even all three signs are not guarantees.
 
"Yes, it is a more positive forecast than we've made in the last few years, but the risk that we see remains," said Ataide.
 
Risks including political uncertainty in Washington, D.C., with the debt ceiling, and in Sacramento with the budget.
 
But the San Diego economy has some unique safety nets, including benefiting from the proximity to Mexico, which is enjoying strength in manufacturing and agriculture.
 
San Diego also benefits from strong technology and tourism, increasing venture capital and the military.
 
In fact, the military is San Diego's trump card, as one in four private sector jobs are tied to the military, according to Ataide.
 
"All of these things work toward making San Diego better than most other cities," said Ataide.
 
Ataide said defense dollars in the past five years made up the bulk of the construction money being spent in San Diego.
 
Now, San Diego is starting to see more private spending as the economy appears to improve, Ataide said.
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