Least expensive San Diego homes to sell in 2018

Beauty is in the eye of the beholder for some of the cheapest homes to sell in 2018. In a year when San Diego County’s median home price hit its highest point in history — $583,000 in August — a few buyers were able to nab properties that were far less expensive but not without some disadvantages, like remote locations or plenty of deferred maintenance.

Many of the homes could just be tear-downs that will make way for a new home on the site, or a second property for someone to get away to on the weekends.

  • 7555 Broken Cinch Trl, Julian — $90,000 (Tie)
    This one-bedroom, one-bath home was advertised as a “diamond in the rough” west of Anza Borrego Desert State Park. The home is only 480 square feet, but the property is two acres and completely surrounded by a fence.

While it is far away from job centers, like many homes on this list, it might be a quicker drive than from other desert homes. It would take roughly one hour and 40 minutes to get to downtown San Diego and an hour and 20 minutes to Escondido.

A selling point of the property is it is surrounded by park land that can’t be developed, allowing for amazing views and wildflowers in the spring. The home was built in 1982, making it one of the newer desert homes on our list. It was originally listed for $110,000 in April, before selling about a month later.

Listing agent Mary Watkins said the previous owner worked at the park but had to move closer to the coast for health reasons. She said the new owner planned to use the property as a getaway. “It wasn’t the best property I’ve ever done,” she said. “But, it was a good value for what they paid for it.”

Read the rest HERE

Are master-planned communities a development of the past?

Much of the history of San Diego County housing has been one of master-plans, including Rancho Bernardo, Scripps Ranch, Carmel Valley, Tierrasanta, 4S Ranch, Mira Mesa and Rancho Peñasquitos.

Master-plans are typically undeveloped areas that are transformed into new communities that include a mix of residential, commercial and places to work. The area is built out in phases and are designed with the hope that residents can live and work in the area.

Real estate consultant Gary London said from the 1970s to 1990s the bulk of new housing came in the form of master-plan communities — mainly up the Interstate 15 and Interstate 5 corridors.

He said a lot of the talk these days is about building dense developments that can accommodate a lot of people, but that is only a recent shift in thinking.

“The way most San Diegans still find themselves housed today are new master-plan communities,” London said, “where to accommodate our growth we built out instead of up.”

He said the difference now is San Diego County is running out of land and voters don’t like new housing projects. A recent example was the proposed Lilac Hills Ranch project that would have included more than 1,700 homes in what is mostly farmland in Valley Center. The plan was soundly defeated by voters in November.

The first big master-plan community in San Diego County outside of downtown was Rancho Bernardo, now the northernmost residential community in the city of San Diego.

The community went from mainly rugged ranchland to 2,000 people in about a year, said the Rancho Bernardo Historical Society. According to the most-recent San Diego Association of Governments data, there was an estimated 50,268 people living there in 2016.

Original Article

2017 San Diego County Real Estate Market Review

There is an ongoing and undeniable national housing shortage. Year-over-year inventory levels have been down in most markets for several years now, and that trend is expected to persist in 2018. Consumers are still purchasing for the first time and relocating to other, presumably more ideal homes.
Having the financial ability to make a move clearly seems feasible to many eager buyers amidst a healthy economy, whether life events such as marriage, children, employment change or desirable downsizing is the reason for moving.

There are further positive signs on the horizon, as builder confidence has improved and construction job gains are measurably higher. It will still take more effort than a lone year can provide for building activity to reach a needed level for inventory balance, but a step in the right direction is welcome.

More sellers should feel ready and willing to list in 2018. Economic indicators such as unemployment rates and consumer confidence are in an improved state, and sellers currently hold the keys in the buyer-seller relationship. This does not mean that sellers can set their price and watch the offers roll in. On the contrary, buyers will be poised to test prevailing price points, particularly in markets where home
price increases are outpacing wage growth and in light of the fact that mortgage rates are expected to increase further in 2018.

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New life for one of Oceanside’s oldest buildings

A new life is about to begin for one of Oceanside’s oldest buildings, a brick structure on Pier View Way that opened as a hardware store in 1888, the same year the city was incorporated.

Now known as the Schuyler Building for its original owner, John Schuyler, the hardware store once sold tools and supplies essential to the rapidly growing region. It later served as a grocery store and a boarding house, among other uses. For the past 30 years or longer, it had a laundry on the first floor and the upper floors were mostly vacant and used for storage.

Now the new owner, Tom Aldrich, plans to open a restaurant on the first floor, a 10-room boutique hotel on the second and third floors, and a public outdoor bar on the roof, with views of the surrounding city and the Pacific Ocean a few blocks away.

“Maybe we’ll call it The 1888 Hotel,” Aldrich said. “We want to keep with the historical aspect of it, if we can.”

He’s already gutted the interior of the building and stripped away the stucco that was applied to the brick exterior in the 1930s. That revealed the original signs painted high up on the walls to advertise “Hardware, Stoves, Crockery and Bicycles,” and another one for “Rooms.” On the eastern side facing the alley, they uncovered a smaller sign that says “Contreras and Gelpi, cash grocers.”

“The significance of this building is that it’s been many things,” said Oceanside historian John Daley, who sometimes leads walking tours of notable downtown sites.

“It’s adjusted to the times,” Daley said. “There’s nothing more appealing than for it to be a boutique hotel in today’s world.”

Read the rest HERE. 

San Diego luxury housing could see a boost under tax plan

Major changes to the tax code approved Wednesday by Congress could mean luxury homes in San Diego County will have more buyers, or at the least, see no noticeable change in sales.

The new tax plan reduces the mortgage interest deduction on new loans up to $750,000, down from $1 million. But, it also significantly reduces the corporate tax rate — meaning well-heeled people with holdings in several companies could have some extra money to spend.

Some real estate agents who sell high-end properties were optimistic after the tax vote Wednesday, especially because they said affluent buyers see real estate as a strong investment.

“You’re going to have wealthy people getting dividends, buybacks, and a lot of money to buy that second or third property,” said Brett Dickinson, a Pacific Sotheby’s International Realty agent. “Now you have excess money that you weren’t really counting on.”

There have been 127 homes that have sold for more than $4 million this year in San Diego County as of Dec. 15, said Reports on Housing, up from 93 during the same time last year. Home sales from $2 million to $4 million had the biggest percentage increase in sales, with 712 sales so far this year up from 471 in 2016.

Steven Thomas, chief economist at Reports on Housing, said he wasn’t so sure the tax change would be a windfall for the luxury market. Instead, he said it could simply keep everything about the same because changes to state and local taxes could hurt prosperous Californians.

“It is hard to surmise what it is going to mean to each individual person,” he said. “At the end of the day, we have a hot market. We are selling more and more luxury homes than ever before.”

Thomas said the people in the cut-off range could be most affected. For instance, he said those with a $900,000 mortgage get to deduct the interest on all of it, but if they try to move up to a $1.2 million house after the tax changes, they would lose $150,000 of deductible interest.

Most San Diego buyers do not need to worry about the deduction. The median home price was $529,750 in October and most buyers put 10 to 20 percent down. Even after the tax changes, with 20 percent down, the entire interest of a home costing $937,500 could be deducted.

From January to October, 8.2 percent of mortgages (including purchase and refinance loans) were more than $750,000, CoreLogic said. That was up 6.3 percent from all of 2016.

Read the rest HERE. 

Housing forecast 2018

Next year could feature more money for renters but increased difficulty for potential first-time homeowners, said experts at a housing outlook conference at University of San Diego.

The shadow of pending legislation in Congress colored much of the discussion Thursday, as did continued concern over the number of homes being built.

No one gave specifics, but panelists said they expect home prices to continue to rise because of decreasing numbers of homes for sale.

The Residential Real Estate Conference put on by the school’s Burnham-Moores Center occurs annually and is typically attended by roughly 200 people. Analysts gave several predictions for 2018:

More money for renters: The standard deduction in both the House and Senate versions of the tax plan is set to double from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples.

“It’s good for renters, but bad for homeowners,” said Norm Miller, real estate finance chair at the USD School of Business.

Fewer tax benefits for homeownership: Both Republican-backed plans look to curtail the mortgage interest rate deduction. Right now, about 74 percent of San Diego city homes are valuable enough to take the mortgage interest deduction, Zillow said. After the proposed tax plan, the real estate website said that would drop to 20 percent.

Tim Sullivan, managing principal of Meyers Research, said San Diego County would be hitter harder than San Francisco if the mortgage deduction is reduced because San Diego’s market relies more on mortgages because wages aren’t as high.

“San Francisco is one of those markets that is inelastic because there is so much wealth there. They don’t rely on mortgages,” he said. “With that in mind, San Diego is still a place where incomes matter.”

Less money for subsidized housing: The Private Activity Bond Program and the 4 percent Low Income Tax Credit, both used to build subsidized housing in San Diego County, would be eliminated in the House plan. While the Senate plan leaves it untouched, panelists were preparing for the worse.

There is already a 10-year waiting list for the units operated by the San Diego Housing Commission. Deborah Ruane, chief strategy officer of the commission, said it used to see families stay in subsidized housing for around three years. Now, families are staying seven to eight years.

“There’s nowhere to go next,” she said.

Push for more homebuilding: Analysts say homebuilding has not kept up with population growth. In 2015 and 2016, the region produced roughly 10,000 homes a year. As of the first nine months of this year, San Diego County has had 18 percent less residential building permits issued compared to the same time in 2016.

“It doesn’t matter who you talk to, we’re undersupplied with housing,” said Sullivan.

Read the rest HERE.

Report: San Diego needs to triple annual housing production

San Diego needs to roughly triple the number of homes it builds each year to keep up with demand and keep prices down, said a San Diego Housing Commission report released Thursday.

The commission, which is the city’s housing authority, produced the report with other government agencies to address rising rent and home costs. It said the city needs to take steps to increase the supply of homes — seen as the biggest reason for rising costs — such as eliminating required parking spots and increasing density in some areas.

The report argued the city would need an additional 150,000 to 220,000 housing units — that’s apartments, condos and single-family homes — by 2028, or 17,000 to 24,000 a year. It’s a tall order because the city’s top annual production rate in the last five years was 6,400 units.

“Whether you are working a minimum wage job or have a college degree and working a full-time job making a decent amount of money, you still can’t afford to rent or buy in San Diego,” said Councilman David Alvarez at a press conference Thursday at City Hall. “That is alarming.”

Read the rest HERE.

Monthly Market Overview July 2017

How long can the residential real estate market go on like this?

We are about two years into a national trend of dropping housing supply and increasing median sales prices. There are some regional variations to the story, but the shift to a predominantly seller’s market is mostly complete. Multiple-offer situations over asking price are commonplace in many communities, and good homes are routinely off the market after a single day. It is evident that a favorable economy keeps hungry buyers in the chase.

  • Closed Sales decreased 8.9 percent for Detached homes and 2.9 percent for Attached homes.
  • Pending Sales increased 11.8 percent for Detached homes and 2.7 percent for Attached homes.
  • The Median Sales Price was up 11.9 percent to $705,000 for Detached homes and 7.3 percent to $440,000 for Attached homes.
  • Days on Market decreased 11.8 percent for Detached homes and 4.5 percent for Attached homes.
  • Supply decreased 32.4 percent for Detached homes and 27.8 percent for Attached homes.

Although the unemployment rate remains unchanged at its favorable national 4.4 percent rate, wage growth has not been rising at the steady clip that would be expected in an improving economy. Sales activity manages to keep churning along despite looming shortages in new construction. Lower price ranges are starting to feel the effects of the supply and demand gap, as firsttime buyers scramble to get offers in at an increasing pace.

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2016 Year In Review

With a new U.S. president from a different political party taking office in 2017, few are expecting federal policies to remain as they have under prior leadership. The incoming president has a deep history in real estate development and has shown a strong interest in funding massive infrastructure projects, two points that provide intrigue for the immediate future of residential real estate. 

After several years of housing market improvement, 2016, as predicted, was not a pronounced triumph but more of a measured success. Markets took a steady and mostly profitable walk from month to month. Even as supply was short and shrinking, sales and prices were often increasing. 

Interest rates were expected to rise throughout 2016, but they did not. Just as happened in 2015, the Federal Reserve waited until December 2016 to make a short-term rate increase. Incremental rate hikes are again expected in 2017. An economy that shows unemployment at a nine-year low coupled with higher wages inspires confidence. Mortgage rates are not expected to grow by more than .75 percent throughout 2017, which should keep them below 5.0 percent. If they rise above that mark, we could see rate lock, and that could cause homeowners to stay put at locked-in rates instead of trading up for higher-rate properties. Such a situation would put a damper on an already strained inventory environment. 

Sales: Pending sales increased 2.5 percent to 16,064 to close out the year.

Listings: Inventory was lower in year-over-year comparisons. There were 2,034 active listings at the end of 2016. New listings remained relatively flat to finish the year at 21,640. Low home supply is expected to continue throughout 2017.

Distressed: The days of a dominating foreclosure market appear to be well behind us. In 2016, the percentage of closed sales that were either foreclosure or short sale dropped by 2.0 percent to land at 8.4 percent of the market. 

Prices: Home prices rose compared to last year. The overall median sales price was up 5.8 percent to $550,000 for the year. When inventory is low and demand is high, prices will rise. Prices should increase in most areas in 2017 but at a slower growth rate. Single-Family Detached homes were up 5.8 percent compared to last year, and Single-Family Attached homes were up 6.8 percent. We will likely need years of improved wage growth to account for recent price gains.

List Price Received: Sellers received 97.0 percent of their original list price received at sale, a year-over-year increase of 0.4 percent. Sales prices should increase again in 2017, leading to further increases in list price received. 

Millennials continue to command attention as the next wave of home buyers, yet the rate at which this massive population is entering the market has been less than stellar. This may be due to a cultural change away from settling into marriage and parenthood until later in life, high student loan debt, or even reservations about a home being a wise investment in the wake of what the last recession did to their elders. That said, some have suggested that this group is simply willing to wait longer to buy, thus skipping the entry-level purchase altogether to land in their preferred home. At the other end of the age and price spectrum, baby boomers are expected to make up nearly one-third of all buyers in 2017. By and large, this group is not looking to invest in over-sized homes, yet we could see improvement in higher price ranges as a hedge against inflation and risk. Shifting wealth away from the stock market into valuable homes may be seen as a safer bet during a transition of power and a period of pronounced change.

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