Demand For Homes Sends Region's Real Estate
Prices Soaring
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By Wally Pickford
Daily Californian staff writer
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The residential real estate boom that began
months ago along the coast finally has moved inland, according to statistics
provided by the East San Diego County Association of Realtors.
Extracts drawn from the Multiple Listing Service show that 22 2-bedroom,
single-family homes sold in May-June for a median price of $139,400 -- a
nearly 40 percent increase over the same two months last year, when the
median price of 23 units was exactly $100,000.
Another indication that the East County market is very hot: The average
length of time homes remain on the market has dropped from 80 days to 56
days.
"The East County market is very active right now," said Laura
Houle, the association's president. "Prices for homes purchased at
peak in the early '90s still have a way to go, but the buyers are circling
and prices are climbing."
New listings are being gobbled up. In May-June, 118 listings sold within
30 days. A year ago, with total listings at a comparable level (1373 vs.
1395), only 70 new listings found buyers in the first 30 days.
Houle said the collapse of the new condominium market has placed added price
pressure on single-family homes, and pushed East County condo resale values
up significantly.
The median sales price for an area condo last year was $88,000; in May-June
it was $95,000. |
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"The situation is bad and getting worse fast,"
said Peter Reeb, a San Diego real estate marketer and consultant. "The
numbers are off the charts for San Diego. The association of governments
says we need 450,000 new housing units in the county by 2020. By my reckoning,
there's only room for 150,000 units -- all told."
Reeb, too, cited the moribund condo market.
"In the peak condo period, in the mid-1980s, there were about 150 new
condo complexes in the works here, selling nicely at affordable prices,
" he said.
"Then, in the 90s, condo owners began suing developers for all kinds
of what were alleged to be structural defects. The suits, many of them class
action, took a huge toll on the industry and have effectively shut down
the market.
"Condo builders can't get insurance anymore, so they aren't building.
As we speak, there are only about 21 new condo complexes available in the
county."
Reeb told those who met at the County Administration center that the crunch
is not unique to San Diego.
"It's also happening in other coastal areas of California, .especially
in Orange County and the Bay Area," he said. "There are still
some affordable homes being built in Temecula and Murrieta, but finding
a single family home for under $200,000 is a trick." |
"The
East County market is very active right now. Prices for homes purchased
at peak in the early '90s still have a ways to go, but the buyers are circling
and prices are climbing."
Laura Houle, president of the
East San Diego County Association of Realtors
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But not everyone who owns property is happy, yet.
"More than a few people who opted for 100 or 125 percent home equity
loans at the beginning of the decade are still hurting," Houle said.
"They still don't have the value they need to liquidate or convert
their properties."
Others are "riding the (long-term) inflation curve," she said,
cashing out to take advantage of the substantial equity increases built
up during a decade or more of ownership.
Houle, a Realtor since 1970 and an independent mortgage broker since 1987,
knows well the wide swings that often characterize the housing market in
Southern California. "Right now," she said, "I think we're
at the beginning of a long, wide swing. Housing affordability is becoming
a serious concern.
"And if anything like the rural heritage initiative passes, closing
down reasonable development in the unincorporated areas, we'll all be in
big trouble," she said. "That proposal is positively awful. It
shuts the door on planned growth and takes planning out of the hands of
the planners."
Houle would be affected directly by the imposition of 40- and 80-acre minimum
lot requirements in the initiative, which was proposed by activist Duncan
McFetridge.
"I have 200 acres in Potrero," she said. "The initiative
would limit me to five lots! I also own 80 acres in Julian, where Mr. McFetridge
would like to limit me to one house."
Were the initiative to pass, Houle said, "one of its side effects would
be to place incredible development pressure on the existing cities and coastal
areas."
Her remarks echoed those expressed Wednesday, at the third of what has become
an annual series of county "housing summits" called by Supervisor
Ron Roberts. |
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Part of the problem, he said, is that demand far exceeds supply. And the
average empty lot in the county now sells for $160,000. "There's no
developer, not even a magician, who can turn a reasonable profit after improving
a $160,000 lot," he said.
Roberts said "the median price of a new home in San Diego County is
now $290, 490. The median price of a resale home is $178,000 and the median
price of a condominium, if you can find it, is $185,990."
"Business leaders who came to the summit said there are about 9,000
good jobs going unfilled in San Diego because of the lack of housing. Companies
who came here for all the right reasons are now beginning to suffer the
consequences of a tight housing market. That's a bad thing."
SANDAG projects that county population will increase from just above 2.7
million to 3.83 million by the year 2020, with most of the growth internal,
not from relocations.
Both Roberts and Reeb said attempts to drastically limit residential growth
will have profound adverse consequences countywide, driving existing home
prices through the roof and creating intolerable urban densities.
Roberts said he opposes the Rural Heritage and Watershed Initiative because
"I don't believe in land use planning by plebiscite. The issues are
far too complex to deal with by ballot."
Roberts summed up his thoughts:
"We are faced with a crisis and there is no quick fix," he said.
"We desperately need more multi-family housing and more condos. The
rental vacancy rate is only two percent and there are more and more families
chasing fewer and fewer homes.
"The real challenge, of course, is to address the problem rationally
and keep an eye on what brought us all here in the first place: The quality
of life in San Diego. Whatever we do needs to keep this the special place
it has always been." |
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