San Diego Housing Market Slowing But Still Strong
The median home price in San Diego County fell slightly last month and signs point to an emerging slowdown in the housing market. The median price remains 23 percent higher than it was one year ago. The drop is attributed to San Diegans taking longer to purchase, bargaining harder, delaying purchases and hoping for price reductions on unsold homes. Despite fewer home sales, DataQuick Information Systems says that it is the second busiest September on record. According to the San Diego Association of Realtors, the number of homes on the market has more doubled since last year and homes are generally selling slower. Buyers are becoming more aggressive so that sellers are less likely to get the top price that they're asking for particularly in Coronado and Mission Hills. Sellers in most areas continue to get close to their asking price.
Courtesy of the San Diego Union-Tribune, October 13, 2004.

San Diego Named One of America's "Most Livable" Cities
The announcement by Partners for Livable Communities that San Diego was one of the "most livable" cities in the nation got mixed reviews from the local government and residents. The non-profit group took into account the climate, beautiful scenery, diverse economy and dynamic downtown. While many agreed with this assessment, others found it difficult to believe. Among the problems cited was the lack of affordable housing, traffic congestion and wildfires.
Information courtesy of the San Diego Union Tribune, April 20, 2004.

Beware Home Mortgage Scams
The Federal Trade Commission wants consumers help in tracking down bogus mortgage companies. These companies often send out emails advertising below market rates and incredible loan terms. Often consumers are told that their application has been accepted (when none was submitted). They are then directed to a website that asks for personal information or to a call-center where they will speak to a telemarketer. The information transmitted at the website may not be secure. In addition, these "national mortgage companies" don't actually broker mortgages. Instead the consumer's information is sold to other companies. The terms of the mortgage may be very different than what was advertised. Consumers also may not receive offers for the best loan that they would normally qualify for. Mortgage shoppers are advised to avoid companies that advertise "low rates" and then require consumers to provide confidential financial information or fill out a full-length application before receiving a "free" quote. Examine the rate that is being offered and ask: is it the true rate and what is the APR once all the financing fees are added in. Ignore companies whose only contact is through a link to a website with no symbols indicating that your personal data is secure. There are several ways you can contact the FTC to report these companies: by forwarding online promotions to uce@ftc.gov, by calling (877) FTC-HELP or by filing a complaint at its website www.ftc.gov.
Information courtesy of the San Diego Union Tribune, April 20, 2004.

Green Lawn Can Mean More Greenbacks for Sellers
Reports show than a healthy lawn can add to a homes value and unlike many home improvements, investing in your lawn won't trigger higher property taxes. Among the reports are:

• Money magazine found that lawn improvements return 100-200 percent of their costs, compared with kitchen and bathroom improvements that on average return 75 and 20 percent of the costs respectively.
• According to Homegain.com, a $500 investment can yield 400 percent that amount on the selling price.
• Clemson University and the University of Maryland found that a well-landscaped lawn can prompt buyers to pay 11.3 percent above the home's asking price.
• According to Gallup, 44 percent of U.S. homeowners said increased property value was the most important benefit of a well-landscaped lawn.

Fire Sprinklers May Become Required in New Homes
San Diego may join the number of municipalities requiring fire sprinklers in new homes. A recent demonstration in Orange County showed the difference that a fire sprinkler system can make. Firefighters set wastebaskets on fire in bedrooms in two adjoining apartments. It the apartment with a sprinkler system, the fire was already out when a fire crew arrived. Their job was mostly limited to damage assessment. Total damages were around $10,000 (including the resident's personal possessions) and was limited mainly to water damage and clean up. The second apartment without the sprinkler system sustained considerably more damage the bedroom, kitchen, balcony and other parts of the home. Total damage was estimated around $60,000 and it would take weeks, possibly months before the home could be re-rented. The San Diego City Council is considering joining other cities that require sprinkler systems. The council is gathering data and considering the increased cost to consumers. Many victims of the October wildfires are concerned because the cost to install the systems won't be covered by their insurance. Currently two cities in the county, Santee and Vista, and six municipalities require sprinklers. Other areas require that homes that don't have easy access, are unusually large, have poor water pressure from the hydrant or are more than ten minutes from a fire station require fire sprinklers.
Information courtesy of the San Diego Union-Tribune. February 29, 2004.

Native Plants Save Water; More Fire-Resistant
The use of California native plants for landscaping can help home survive a wildfire similar to the ones that swept through the county last October. Through the use of "fire-landscaping" the use of plants in a 150-400 foot swath around a home (how wide depends upon the local topography), homeowners can create a visually appealing defensible area around their homes. In addition, many of these plants have the added benefit of being drought and sun resistant and may use less water. Choose plants for the "firescape" carefully - not all drought resistant plants are able to withstand wildfires and some are flammable.
Information courtesy of the San Diego Union-Tribune, December 30, 2003.

Contractor Complaints Near Top of List for Consumer Complaints
In the latest survey by consumer advocacy groups, more complaints were fielded about contractors than any other work group except for auto salespeople. The most frequent complaints included: failure to use a written contract, abandonment or refusal to complete work, workmanship issues and noncompliance with building codes.
Information Courtesy of the San Diego Union Tribune.

Homeownership May Remain the "Impossible Dream" for Many CA Renters
Renting may no longer be a "stage" on the way to homeownership for many California renters. Although the increase in market rental rates is good news for owners and investors, increasingly residents are being forced to pay more of their incomes toward rent. Incomes haven't keep pace with rising housing costs and the increasingly short housing supply has exacerbated the situation. In addition, it has become nearly impossible for renters to afford the median priced homes in the state. A report released this month found that only 25 percent of California residents could afford a median-priced home. Many areas such as Orange County and San Francisco have median home prices topping the half-million dollar mark. The expected 20 percent down payment would be beyond the savings ability of most renters and the new homeowners would have a monthly payment of around $2,400 compared to the average rent of $1,600.
Information Courtesy of Realty Times, February 4, 2004.

San Diego Housing Some of the Least Affordable in CA
The San Diego Region along with the Northern Wine Country rank as the least affordable areas to live in the state. Both regions reported that only 15 percent of households are able to afford a median-priced household according to the Housing Affordability Index for December 2003. San Diego dropped eight percentage points from the same month in 2002 tying it with the Wine Country. Statewide, housing affordability dropped to 23 percent down from 28 percent in December 2002.
Information courtesy of the San Diego Union-Tribune, February 5, 2004; "S.D. Housing as Affordable as 'Wine Country'."

NAHB Predicts Housing Market Will Remain Strong
The National Association of Home Builders predicted that home sales will rival last years levels if interest rates continue to remain low. David Seiders, economist for the NAHB, predicted that home sales would be about 3 percent lower than last year, but that the sales rate would still be historically high. He said though that estimate may prove conservative if economic factors continue to keep the interest rates low. Nationwide, new homes process are expected to rise 5 percent. This falls short of the estimate for Southern California, however, where homes are expected to appreciate 10 percent.
Information courtesy of the San Diego Union-Tribune, February 8, 2004.

Housing Construction Levels in CA Highest Since 1989, State Still Has Deficit
Homebuilders in California report that new home (135,016) and apartment (56,850) construction is at its highest level since 1989. Only Florida reported more residential construction (205,000). Unfortunately it's not enough to ease the nation's most severe housing shortage. Last year the median home price rose 17 percent, decreasing the number of buyers that could afford a home to 25 percent. According to NAHB economist, Michael Carliner, "California is probably the only part of the country talking about a housing shortage." The increase in homes built is attributed to lower interest rates, which gave people more buying power even when prices were surging. The trend is expected to continue until 2005 when higher interest rates will "force a slowdown." California will need to construct more than 220,000 new homes and apartments a year until 2020 to keep up with the demand according to state officials.
Information courtesy of the San Diego Union-Tribune, "Builders in California Report Most New Houses Since 1989," January 11, 2003.

Credit Reporting Errors Common
Twenty-nine percent of consumers are plagued by incorrect information on their credit reports that can cause their credit rating to vary widely from one agency to another according to a 2002 study by the Consumer Federation of America. These mistakes can cost thousands of dollars in higher interest payments. According to Consumer Reports these reports can be much more difficult to correct than they are to make. The most common dispute involves account mix-ups. Calling the agency can be difficult because consumers can't always reach a live person and may be forced to navigate difficult calling systems. If a phone call or email doesn't solve the problem, try sending a certified letter. Document all contact with creditors. If the creditor is difficult about correcting an error, you can add a 100-word statement to your report so that anyone who views it knows the information is disputed. Consumers can also call their state's attorney general's consumer complaint hotline. The magazine recommends pulling your credit report at least 3 months before taking out or refinancing a mortgage to avoid any surprises.
Information courtesy of Consumer Reports, January 2004.

Fifteen Percent of New Homes Have a Construction Defect
150,000 out of a million new homes built last year had some sort of construction defect according to Consumer Reports. The most common problems were foundation and water intrusion, which can lead to a variety of other problems including: mold, rot, staining and cracked walls (inner and outer). The magazine said that the number of defects was due to high construction because of the housing shortage and not enough skilled laborers.
Information courtesy of the San Diego Union-Tribune, December 21, 2003.

Pennsylvania Housing Council Amends Overcrowding Ordinance
A local overcrowding ordinance that required a Lansdale, Pennsylvania landlord to evict a family of four from their two-bedroom apartment home has been amended after a fair housing agency notified the borough that the ordinance was in violation of federal fair housing laws. The original ordinance prohibited two children of the opposite sex over the age of 5 from sharing a bedroom. Landlords that did not comply with the law faced the loss of their rental licenses and fines. The ordinance has been amended so that occupancy standards are based on non-discriminatory criteria such as square footage and number of bedrooms.

Congress Grants Three-Month Extension to Flood Insurance Program
The House and Senate voted to extend the National Flood Insurance Program for three months in order to allow time to come to an agreement on a new act. The original bill, S. 1768, was passed in 1968 and was originally scheduled to expire on March 31, 2004. The bills being considered would limit the number of claims that could be filed by a repetitive-loss property. NFIP covers 4.4 million policyholders. Repetitive loss properties cost about $200 million annually. Although they account for only about one percent of insured properties; they account for 25 to 30 percent of all claims filed. Under the new bills properties the qualify as severe repetitive loss properties would have to be elevated, relocated or demolished. If these measures are not taken, the policy holders would face up to a 150 percent premium increase.
Information courtesy of the Insurance Journal West, December 15, 2003.

November Home Sales Strongest Since 1988
The median price for all house and condominium sales was up to $393,000 - 12.6 percent higher than last November according to DataQuick. Although home prices are no longer increasing at a phenomenal rate, property values are still increasing steadily. November prices are up 18.7 percent from a year ago and are $3,000 more than in October. Last year's gain from November 2001 to November 2002 set an all-time record at 27.4 percent. The California Association of Realtor's reported that its monthly affordability index showed the San Diego region had the least affordable housing prices in the state for any major metropolitan area. Only 16 percent of the area's residents can afford to buy a median-priced home. Year-over-year price increases are expected to settle to a more modest rate of 8 or 9 percent by next spring. Homes are taking a little longer to sell, 45 days for single-family homes and 35 days for condos, but well-priced homes receive multiple offers. The 4,688 homes sold pushed November sales to its highest level in 15 years. Information courtesy of the San Diego Union Tribune, "November Housing Sales Strongest in 15 Years," December 16, 2003.

San Diego Job Growth Projected to Be Stronger Than Rest of Nation
A survey by Manpower Inc., found that San Diego employers are more optimistic than employers nationwide when it comes to hiring. One third of local employers are planning on adding jobs during the first quarter of 2004 compared with one fifth of employers nationwide. Only about 12 percent of employers expect their payrolls to shrink. In San Diego the optimism appears well founded. Nine out of ten industries surveyed are more optimistic about hiring than they were the same time last year.
Information courtesy of the San Diego Union Tribune, "County's Employers Plan to Add Jobs," December 16, 2003.

San Diego Enterprise Zones
The city of San Diego is home to two of 39 statewide Business Enterprise Zones. These zones, the Metropolitan Enterprise Zone which includes portions of the Downtown area and the South Bay Enterprise Zone which includes San Ysidro, Otay Mesa and parts of Chula Vista, offer incentives such as tax savings on the California business income tax. These credits include tax credits on equipment purchases, a credit on hiring new employees and a net interest deduction for lenders to businesses located within an Enterprise Zone. These business zones are only available for a limited time. The South Bay Zone expires in January 2007 and the Metropolitan Enterprise Zone expires in October 2006. For more information call the Community and Economic Department at (619) 533-4233 or visit the city's website.

Regional Loan Fund Created to Help Small Businesses
The cities of San Diego, Chula Vista, Imperial Beach and National City have teamed up to establish and operate a revolving $3 million loan fund that offers loans to small businesses in certain areas of Central and Southern San Diego County. The loan offers financial assistance to start-up and expanding businesses. Loans are expected to range from $150,000 to $500,000. The fund was created when the city of San Diego applied for and received a $1.5 million dollar grant from the U.S. Economic Department Administration and then the four cities matched the funds. For more information call the Community and Economic Department at (619) 533-4233 or visit the city's website.

San Diego's Growing Affordability Problem
The rising home prices have been great news for homeowners. Unfortunately, it's bad news for those trying to get into the homeowner's market or are looking for affordable rentals and the affordability gap is growing. It will take a median income of $100,000 to afford a median-priced home in San Diego County according to the California Association of Realtors. The average worker needs to make $22.60 an hour or $47,000 a year to afford the fair market rent of $1,175 on a typical two bedroom apartment. This means that many families are facing affordability problems or looking elsewhere for housing such as Southern Riverside County and Baja California. Home prices are expected to continue to rise faster than household incomes.
Some information courtesy of the San Diego Union Tribune.

More Condos and Apartments are Being Built
Multifamily dwelling construction in San Diego County has gotten a boost as developers are looking for ways to accommodate the growing demand for more affordable forms of housing. For more than a decade builders backed away from building more condos and apartments because of an oversupply and increased litigation in the late '80s. Low vacancies and the passage of Senate Bill 800, which will help control litigation, have developers re-entering the multifamily market. There has been a 47 percent increase in the number of permits issued for multifamily dwellings since last year. In addition, more apartment buildings are being converted into condos. There is some concern because the rate of conversions outpaces the supply of new apartment conversions, which could create a shortfall in the number of rentals.
Some information courtesy of the San Diego Union Tribune.

San Diego Median Home Price Exceeds $400K
The county median home price reached a record median home price of $412,000 in August and the resale price of condos in expected to exceed $300,000 later this year. Home prices have more than doubled since 1995 and home prices have consistently been $10,000 higher than the same month of the previous year since December 1997. Most sources that prices will continue to rise although at a slower rate. The demand has remained strong because of San Diego's chronic housing shortage and historically low interest rates on home mortgages. There is some concern that there may be problems down the line because fewer people are able to live in the area, but there are no immediate problems expected.
Some information courtesy of the San Diego Union Tribune.