San Diego Market Update: october 2020

by Adam Manly, Business Development Manager at Good Life Property Management

Here are the San Diego real estate headlines worth reading about for October 2020, along with my key takeaways.

Proposition 15

  • Requires commercial and industrial properties to be taxed based on market value and dedicates revenue. 
  • A "yes" vote supports this constitutional amendment to require commercial and industrial properties, except those zoned as commercial agriculture, to be taxed based on their market value, rather than their purchase price.
  • A "no" vote opposes this constitutional amendment, thus continuing to tax commercial and industrial properties based on a property's purchase price, with annual increases equal to the rate of inflation or 2 percent, whichever is lower. 

Proposition 21

  • The ballot measure would replace the Costa-Hawkins Rental Housing Act (Costa-Hawkins), which was passed in 1995.
  • The ballot measure would allow local governments to adopt rent control on housing units, except on (a) housing that was first occupied within the last 15 years and (b) units owned by natural persons who own no more than two housing units with separate titles, such as single-family homes, condos, and some duplexes, or subdivided interests, such as stock cooperatives and community apartment projects.
  • A "yes" vote supports this ballot initiative to allow local governments to enact rent control on housing that was first occupied over 15 years ago, with an exception for landlords who own no more than two homes with distinct titles or subdivided interests.
  • A "no" vote opposes this ballot initiative, thereby continuing to prohibit rent control on housing that was first occupied after February 1, 1995, and housing units with distinct titles, such as single-family homes.

California Association of Realtors releases 2021 Housing Forecast

  • C.A.R. released its housing forecast for 2021 this month
  • The report predicts that a combination of low inventory, historically low interest rates, and high demand from qualified buyers will continue to support home sales in 2021
  • Sales growth will overall be limited however due to continued economic uncertainty from the pandemic

San Diego Outpacing Nation’s Top 10 Metro Markets

  • As of September, prices in the San Diego metropolitan area had risen 6.2 percent in a year, according to the S&P CoreLogic Home Insights Report
  • San Diego is leading the way in year over year price increases amongst the nation’s top 10 metropolitan markets
  • Strong buyer activity continues even into the fall which historically marks the beginning of the seasonal market slowdown

Federal Housing Finance Agency postpones new refinance fee

  • The FHFA implemented a new 0.5% fee for the majority of people refinancing a Fannie Mae & Freddie Mac Loan
  • Originally scheduled to take effect 9/1/20 the refinance fee has been postponed to 12/1/20
  • Talk to your lender about refinancing now if you have one of these types of loans

Adam’s Take

  • With the sharp decline in year over year inventory, and promising signs of strong activity even as we move into the slow season, I think we are likely to continue to see quick sales on hot properties, and multiple offers even as we move into the winter
  • This will be further exacerbated by the tightening of lending standards bringing only very qualified buyers to the table right now 
  • While San Diego’s unemployment rate remains around 10% we are also still seeing many groups of qualified renters, and we are still renting many properties quickly even as we transition into winter.
  • I am continuing to monitor the ever changing legal landscape here in CA and we are working hard to keep you as updated as possible on the legislative changes that are going to affect you. Both with regards to the impacts of COVID-19 and beyond.
  • Not to get political, but there are also some important Real Estate related ballot measures (as always) that you should pay close attention to this election cycle. Specifically we are encouraging NO votes on propositions 15 and 21 to help protect landlords, tenants, and the housing market.