What!? There's a housing slump in this country right now? Surprisingly, this might be true. New construction has picked up slightly but it is substantially down from the same time as last year. The building permits all over the place including for condos, apartments and homes but they were down by 3% in the second 1:45 thousand 17 compared to last year at this time. However, this is an improvement from the first three months that showed a 37% decrease in residential permits. In the first six months of 2017, San Diego County issued over 17% fewer permits as the same time as last year.
This lack of new homes does push the prices up because of competition. While higher home values are good for homeowners and sellers, it can make homeownership difficult for many first-time buyers.
Our slump in the housing market is mainly due to a drop in multifamily permits, or those of apartments and condominiums. This less aggressive phase in terms of increasing rental rates could have an impact on the local housing market. It's difficult for a builder to make the budget work financially when the rental revenue doesn't go up as quickly.
Over the first six months of the year there've been 2633 multifamily unit permits issued compared to over 3800 last year during the same time.
Other factors can play a major role in the slowing of housing including the lack of buildable land, community opposition and government issues that can restrict permits and slow down progress.
Even if you are already a homeowner, this could affect you and the entire economy. For rental and home price increases, companies have to work harder to recruit workers for the area. With housing costs going up, more and more employees are seeking outside housing options.
Most economists and forecasters predict that Southern California will add more housing in 2017 the 2016 despite the numbers currently. The UCLA Business Forecasting Project, as well as several realtor associations and finance departments, predict that they will have 2400 8800 more residential building permits this year than 2016 when it's all said and done.
For those that want to make a commute, Riverside County has built more single-family homes than anywhere else in Southern California, nearly double that of San Diego, Los Angeles and Orange County.
If you'd like more information about the current San Diego housing market, rental prices and current home prices contact our office today or stay abreast of the latest San Diego real estate news by subscribing to our blog.