[JavaBrewer]

San Diego RE has/is taking a solid beating with South County (Chula Vista/Eastlake) leading the charge and North County (Rancho Bernardo/Poway/Escondido/San Marcos/Encinitas/Vista) trailing. Not surprisingly these are the communities that had a gigantic growth spurt in the late 90s' and early 2000. Lots of foreclosures and many more coming this year.

I think with a solid 20% down your neighbor could do very well - like picking up a home that previously sold for $850K for $600K. It all depends on how they like the area and the stability of the new gig. Renting in San Diego is still very expensive but I would still recommend it for the first 6 months so they can get a feel for the area and decide if SD is a long term candidate for residency. With the coming increase in foreclosures that $600K home could slide even more though it really depends on the neighborhood.