Multifamily Housing Buildings 1031 Exchange Free Pricing Analysis San Diego Blog Brokers

Multifamily Housing Buildings 1031 Exchange Free Pricing Analysis San Diego Blog Brokers

2018 San Diego Multifamily Real Estate Market Report | Apartment Building Sales Outlook

First Quarter 2018 San Diego County Multifamily Real Estate Housing Market Report. To download full version please visit: http://www.ApartmentRealtyGroup.net/resources/research-san-diego-multifamily-market-report/ 

We are dedicated to providing our clients with industry-leading technology allowing for real-time market information. Investors can rely on our customized, ‘one-on-one’ approach to research and analysis in order to make sound investment decisions.

CURRENT MARKET CONDITIONS:

UNEMPLOYMENT: San Diego County unemployment rate is 3.3%

RENT: Rents are expected to rise county-wide by 2.9% in 2018

VACANCY: The current vacancy rate in San Diego County is 3.3% down from 3.7% reported in the Spring 2017 survey

VACANCY RATES BY REGION:

• NORTH COUNTY - 3.9 percent
• CITY OF SAN DIEGO - 3.2 percent
• EAST COUNTY - 3.2 percent
• SOUTH BAY - 2.8 percent

SAN DIEGO COUNTY APARTMENT MARKET PERPSECTIVE: February 2018

With positive job growth in government, education, health and business services – and no sign of the housing shortage troubles abating anytime soon – the San Diego MSA remains a strong marketplace for residential rental housing. Though we lost jobs in the scientific and technical services industries – Qualcomm layoffs were national news – we are receiving a continued boost of new jobs – especially from the military and small business sectors. There’s also been an increase in military and defense contractor jobs and future signs point to positive growth in military spending. The metro ranks high in the country for startup business activity – venture capitalists continue to invest in San Diego – and we are home to one of North America’s top high-tech and life-science clusters.

Though rates of return are dipping into the four percent range – investors still see value in San Diego when compared with markets to the north; Orange County, Los Angeles and San Francisco. We are still in a market driven heavily by 1031 exchange transactions as new investors use FHA, VA and Conventional financing to purchase 2-4 unit duplex, triplex, and fourplex rentals, and seasoned investors trade-up into bigger multi-family properties (5+ units). Rents continue to increase by 3% annually. Sub-markets from Pacific Beach to East County up through Fallbrook continue to see shortages in residential housing stock of all varieties. There is little construction evident outside of Downtown as developers scratch their heads at the high construction costs and long wait times for building permits. The big question moving through 2018 will be how the recent uptick in mortgage rates will impact cap rates and buyer sentiment.

VACANCY DATA IS COLLECTED FROM THE SAN DIEGO COUNTY APARTMENT ASSOCIATION (SDCAA) FALL 2016 San Diego Vacancy & Rental Rate Survey.' SALES DATA STATISTICS ARE PROVIDED VIA COSTAR COMPS: 5-50 UNITS FROM 1/1/2017 – 12/31/2017. UNEMPLOYMENT SOURCE: CA EDD January 19, 2018). 2018 Rent Forecast via Zillow report December 21, 2017. This information is for discussion purposes only and we believe to be reliable however, we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Principals must verify the information and bears all risk for any inaccuracies. Apartment Realty Group (ARG) and/or any affiliate and/or agent(s) is not qualified to provide, and have not been contracted to provide, legal, financial, or tax advice, and that any such advice regarding any investment by the recipients must be obtained from the recipients’ attorney, accountant, or tax professional.

Our team offers a competitive advantage for investment real estate services. Over 75 years of combined experience, diligent & ethical conduct and a unique brokerage platform combining strategic marketing strategies and effective contract negotiations are some of those advantages. As specialists in San Diego County Apartment Sales, 100% multi-family focused, we have a track-record of obtaining the highest prices in the marketplace for our clients when the time comes for them to sell. Should you have interest in obtaining an estimate of value or discussing 1031 exchange or exit strategies, consider us as a resource. Our mission is to assist apartment owners maximize value and bottom-line return by offering the industry’s most effective marketing strategies, capital solutions and market insight while providing high-level execution.

Pacific Beach Apartments Sold For $3.7M

February 12, 2018

Source: San Diego Business Journal

By Ray Huard

A Pacific Beach apartment complex has been sold for $3.7 million.

The 16-apartment complex at 3455 Del Rey St., was sold by The Ann Rosalie Kostanzer Trust of San Diego to Del Rey Bay Enterprises, LLC of La Jolla.

The complex has two two-bedroom, one-bathroom apartments of about 725 square feet each and 14 one-bedroom, one-bathroom apartments of about 500 square feet each.

Gary Urtiaga, senior vice president, and Diane Green, investment associate, of Apartment Realty Group represented the buyer and the seller.

Survey: San Diego Business Community Optimistic About 2018

February 18, 2018

Source: Times of San Diego

By Chris Jennewein

The latest poll by the San Diego Regional Chamber of Commerce shows continued optimism about the local business climate in 2018.

The monthly poll of chamber members showed business sentiment unchanged between December and January. The chamber’s Business Outlook Index stood at 19.7, marginally below the index’s long-term average and twice as high as the recent low of 9.3 in October 2016.

Expectations about all four components of the index—the number of employees in companies, number of hours offered to workers, revenue, and business conditions—were all holding steady in the report released Friday.

“Businesses in the consulting and cyber/software industries lead the way in confidence this month,” noted Tom Wornham, president and CEO of San Diego Private Bank, sponsor of the forecast. “Firms in both industries are optimistic about increasing their number of employees in the next three months, with business consulting firms also hopeful about increases in hours offered to workers and increases in revenue.”

The poll also asked local businesses about their top legislative priorities. Only 26 percent think the San Diego region is getting its fair share of state resources, and the top priorities for Sacramento lawmakers are seen as keeping a lid on taxes and addressing the lack of housing supply.

The latest survey was fielded Jan. 11-23 by Competitive Edge Research & Communication using responses from 202 randomly selected members of the San Diego, East County, Alpine, Escondido, Lakeside, Vista, Santee, Encinitas and National City Chambers of Commerce.

San Diego Lawmakers Introduce Bill Aimed At Creating Affordable Housing

February 14, 2018

Source: KPBS

By Matt Hoffman

State and local lawmakers want to make it easier to build more affordable housing units. Assembly Bill 2372 authored by local State Assemblyman Todd Gloria and Assemblywoman Lorena Gonzalez-Fletcher would create a new incentive for developers.

Currently, the City of San Diego uses a unit per acre calculation to determine the maximum number of units a developer can build. The more units they have, the more fees they pay annually.

Traditionally, developers have been incentivized to build affordable housing with density bonuses. If builders agree to create low-income housing units, it means they could potentially build more overall units.

AB 2372 would give developers a new floor area ratio, FAR, incentive, allowing them to calculate the number of potential units and fees based on square-footage and not units per acre. Gloria believes this would allow developers to maximize space.

"This is a bill that is intended to increase the overall production of housing units." Gloria said. "By switching our unit of measurement from dwelling units per acre to a floor area ratio, we think we can get units that are more affordable without a taxpayer subsidy in places where we need it, specifically along transit priority zones.”

The proposed bill stipulates developments would have to be near transit, and at least 20 percent of units must be designated for low-income housing.

Gloria's office says AB 2372 will soon be referred to the appropriate Assembly committees for consideration and review.

Last year's housing market broke records

February 14, 2018

Source: The San Diego Union-Tribune

By Phillip Molnar and Shaffer Grubb

The housing market reached new price peaks in 2017, shattering records left over from the 2005 housing boom.

Home prices rose as the number of homes for sale continued to drop — even more so than previous years. Meanwhile, the number sales stayed about the same.

Strong job growth, low unemployment and historically low interest rates all contributed to rising prices, said Mark Goldman, finance and real estate lecturer at San Diego State University.

“If you look back at 2017, it was a robust year,” Goldman said. “Interest rates were quite good, the economy was continuing to barrel ahead, wages were strong, employment was strong and millennials were aging into the homebuying market.”

How prices compare

The median home price reached $529,000 last year, above the $500,000 peak in 2005 and 2006. Still, when adjusted for inflation, last year’s median is about $11,000 less than what it was in the housing boom.

Inventory was down

Nationwide home inventory is down, not just in Southern California. A lack of home construction during the recession is seen as a reason because housing units did not keep up with natural population growth. In San Diego County, the monthly average home listings last year were about 5,000 homes, down from roughly 7,000 in 2014.

Sales were up in 2017

The number of home sales sold each year for the last decade has not varied much despite fewer homes on the market and rising prices.

Homes sold fast

Increased competition for the reduced number of homes for sale meant homes stayed on the market for fewer days. Last year, a home sold in an average 31 days — the fastest since at least 2006 when the Greater San Diego Association of Realtors started keeping records.

Communities with the fastest price growth

The median resale home price in Ocean Beach had the biggest increase in San Diego County in a year, rising 21.9 percent to a median $1.06 million. Other communities with big increases were Pauma Valley, Solana Beach, Spring Valley and Logan Heights.

Where the most sales are happening

With new home construction way below historical averages, most buyers seek out a resale home. The most sales took place in North County, largely dominated by Oceanside.

Neighborhoods with the biggest gains since the boom

Since 2005, several neighborhoods have seen home prices increase by more than 40 percent. The highest was small Warner Springs in unincorporated San Diego County, followed by La Jolla and Grantville.

Just Listed for SALE by Apartment Realty Group (ARG) Triplex/Townhome Units in Oceanside, California

Contact us to take advantage of the multifamily market!

Apartment Realty Group (ARG)
Phone: (858) 859-1031
Website: www.ApartmentRealtyGroup.com
Email: info@ARG1031.com

One of our listings that we just brought to the market:

340 S. El Camino Real
Oceanside, CA 92058

Property Overview:
The subject property is a three (3) unit apartment complex comprised of all 2Bedroom / 1.5Bathroom (two-story, townhome-style units). Amenities include, patios, balconies, on-site parking, and three (3) single-car garages.

This is a great opportunity for an investor seeking a property with immediate rental upside with spacious and a unique floor plans while securing 30-year fixed financing. This property is also fantastic opportunity for an owner-occupant as this property boasts spacious floorplans.

Property Highlights:
- All 2Bdrm/1.5Bathroom Townhome-Style Units (1,115sf)
- Three (3) Single-car Garages
- High Demand Rental Market - Oceanside, San Diego County
- Residential, 30-year Fixed Financing Available
- Spacious Patios Accessed from Living Room
- Balconies From Upstairs Master Bedroom
- Onsite Laundry Room
- Immediate Upside in Rental Income
- Fantastic Investment or Owner-Occupant Opportunity
- Only a Few Miles to the Beach
- Easy Access to Local Services and Major Freeways
and Major Freeways

APARTMENT REALTY GROUP (ARG) is a leading San Diego commercial real estate brokerage firm focused exclusively on the sale of multi family investment properties. We are comprised of a seasoned team of multifamily advisors with a track record of providing value-added brokerage services. Our specialized platform offers a unique blend of teamwork and experience allowing us to deliver customized investment real estate solutions.

Apartment Realty Group (ARG) has an extensive track-record as San Diego County and Southern California multifamily market specialists.
Our mission is to assist apartment owners maximize value and bottom-line return by offering the industry’s most effective marketing strategies, capital solutions and market insight while providing high-level sales execution.

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www.ApartmentBrokerSanDiego.com

Proposal to expand rent control in California fails to advance

January 11, 2018

Source: LA Times

By Liam Dillon

Thursday's decision does not end the rent control debate. Advocates also are collecting signatures for a possible November 2018 ballot measure that would repeal Costa-Hawkins. The AIDS Healthcare Foundation, a Los Angeles-based nonprofit and veteran of high-dollar local and state initiative campaigns, is one of the groups behind the effort.

VIDEO: 2018 CALIFORNIA ECONOMIC OUTLOOK

January 10, 2018

Source: XPERAGroup

Posted by Justin Cox

Alan Nevin, Xpera Group's Director of Economic & Market Research, just published his 2018 Economic forecast for the United States and California. As one of the nation's top Real Estate Economists, Mr. Nevin closely monitor's the state's economy with emphasis in the Real Estate and Construction sector.

After a very eventful and prosperous year for California, Alan once again dive into the data to read the demographic and market forces shaping the golden state and nation.

You can watch the short preview of the forecast that was sent out to Xpera's clients over the Holidays below:

Watch the video here>>

Contact us to take advantage of the multifamily market!

Phone: (858) 859-1031
Website: www.ApartmentRealtyGroup.com
Email: info@ARG1031.com

APARTMENT REALTY GROUP (ARG) is a leading San Diego commercial real estate brokerage firm focused exclusively on the sale of multi family investment properties. We are comprised of a seasoned team of multifamily advisors with a track record of providing value-added brokerage services. Our specialized platform offers a unique blend of teamwork and experience allowing us to deliver customized investment real estate solutions.

Apartment Realty Group (ARG) has an extensive track-record as San Diego County and Southern California multifamily market specialists.
Our mission is to assist apartment owners maximize value and bottom-line return by offering the industry’s most effective marketing strategies, capital solutions and market insight while providing high-level sales execution.

Apartment Realty Group (ARG) is San Diego-based, and is locally owned and operated. We are not headquartered in New York or Chicago, and we don’t report to Wall Street. We are a privately-held boutique commercial real estate and multifamily brokerage firm with a track record of providing value-added investment real estate services to apartment owners, multifamily developers and investors.

Clients rely on our research, market knowledge, product specialization and transactional expertise to formulate and execute their investment objectives. We possess the experience to work through complex issues related to underwriting, deal structure, financing, market analysis, contract negotiations, and due diligence. Clients interested in selling benefit from our exclusive network and marketing platform that targets local, regional and national investors.

No matter the size or complexity of the property – we are equipped with the resources and the experience to maximize value for multifamily property owners of any size.

We have one single focus, Apartments; we specialize in the disposition, acquisition, exchange and finance of multifamily apartment properties. Because we are 100% focused on multifamily investments; we understand the market and are more responsive to market trends in order to meet the needs of investors.
All of our efforts and resources are spent brokering, underwriting, researching and maintaining the most effective database of multi-family property owners, operators, managers, brokers and capital sources in the industry. Our unique specialization has enabled us to provide sellers with specialized strategies to maximize property values with our ability to create competition for each asset we market as well as providing buyers and 1031 exchange clients with sound investment options which are not generally available in the marketplace.

#SanDiego #CommercialRealEstate #ApartmentBuildings #ARGSanDiego #Multifamily #1031Exchange #BuyApartmentBuilding #MultifamilyInvestments #FreePricingAnalysis #FreeBrokerOpinionValue #ApartmentBuildingsforSale

www.ApartmentRealtyGroup.com
www.ApartmentBrokerSanDiego.com

Recession could be coming, says chamber economist

December 1, 2017

Source: San Diego Union-Trubine

By Roger Showley

Bad economic times may be coming, an economic forecast panel learned last week.

• The downturn will be short and San Diego will suffer less.
• Housing is a growing problem, especially for military families.
• Employees want hotel-like services at the workplaces.
• San Diego will get over the departure of the Chargers and a possible sale of Qualcomm

A national recession is coming but it will be relatively brief and affect San Diego County less drastically than other areas.

That was the headline prediction at last week’s 30th annual economic forecast forum, sponsored by the local chapter of the Institute for Real Estate Management.

It came from Sean Karafin, vice president of public policy and economic research at the San Diego Regional Chamber of Commerce, who cautioned the crowd of about 200 at the Fairmont Grand Del Mar hotel that economic predictions are notoriously unreliable.

He did not say when a recession might occur and noted that Gov. Jerry Brown annually warns of an economic downturn when he issues his annual budgets.

“We’re going to have a recession,” he said. “Is there something driving it like a bursting of the housing bubble? Probably not. If we have a recession, it won’t be like the last one. Most likely we’ll recovery relatively quickly.”

He said San Diego’s “three-legged stool” economy of the military, tourism and innovation industries should allow San Diego to weather any downturn.

Kerafin clarified his views Tuesday that local growth will likely be more moderate in 2018 than 2017.

“I do agree that we are hitting a plateau,” he said.

Of San Diego’s main economic drivers, he said hospitality is the one most likely to feel a “dip,” since the other two will continue to benefit from federal grants and budget support through any recession.

“It is one of our strengths,” he said. “If we had a recession nationally, it would be reflected more likely in hospitality than the other two.”

Hotels inspire workplace designs

Ironically, the speakers focused on hotel design as a model for making commercial real estate more successful in the years ahead.

Greg Strangman, chief creative officer at the Live Work Play Group that develops hotels, restaurants and housing, said consumers, especially millennial-aged workers, don’t crave large guest rooms — they’d rather check in, drop off their luggage and head for the bar.

Jim Chatfield, senior vice president for property management at JMI Realty, agreed: “I think room service and the minibar are going away.”

Kevin Heinly, managing director of the local Gensler architectural firm, said office park developers are adopting hospitality elements in their projects.

“We’re doing barber shops and microbreweries in suburban office parks,” he said. “We’re seeing more demand for personalized services in the workplace.”

Housing concerns, especially for military

Another trend that dominated the discussion was housing.

Karafin said chamber members uniformly express worry about where their workers will live, given San Diego’s high prices and low vacancy rates.

He said long-term assessments pointed to San Diego’s needing 160,000 new housing units between 2010 and 2020.

“We’re on pace to hit 50 percent of that as a region,” he said. “That means it’ll get a lot worse.”

Terry Magee, a career Navy fighter pilot, defense industry manager and now member of the San Diego Military Advisory Council, said the military is also worried about housing in San Diego, where it expects to add 15,000 active duty personnel to the 110,000 currently by 2025.

“Affordable housing is the No. 1 challenge to the military,” he said.

But the solution is not more military construction but rather more public-private partnerships.

Magee said the Navy is seeking long-term leasing agreements with landlords to house the military in private developments with occupancy and rents guaranteed through the military’s housing allowance programs.

He also said the Pentagon is considering redeveloping its 60-acre SPAWAR complex next to Old Town, a step could result in both new office space for the secretive research-and-development unit and new housing.

Qualcomm takeover a worry

The forum also addressed the impact if Qualcomm is acquired by Singapore-based Broadcom. Karafin said any downsizing and selloff would be regretted locally but the company’s highly educated workforce likely would find new jobs at other firms or start their own companies

“It’s huge driver for us and it would be a shame if that were to come to fruition,” said Lynn LaChapelle, managing director at the Jones Lang LaSalle brokerage who oversees capital market transactions at the local office.

Karafin also discounted any significant economic impact on the loss of the Chargers, with Strangman chiming in, “It’s a bummer they’re gone, it should not have happened, but we are more than one team.”

Will San Diego finally adopt regulations legalizing Airbnb rentals?

December 11, 2017

Source: San Diego Union-Tribune

By Lori Weisberg

San Diego’s elected leaders on Tuesday will weigh two rival proposals for regulating the city’s thousands of short-term rentals, following years of heated debate.

• Short-term rentals on platforms like Airbnb are currently deemed illegal by the City Attorney’s office.
• One proposal, drafted by four of the nine council members, would allow short-term rentals to operate year-round, but would require a three-night minimum stay in the heavily impacted coastal communities. Owners would be limited to no more than three short-term rentals.
• A competing proposal is more restrictive, allowing hosts to rent out only their primary residence for up to 90 days a year.
• Whatever regulations are eventually adopted, permits would be required, with part of the fee going to pay for 13 more code enforcement positions to address nuisance and noise violations.

Nearly three years ago, hundreds of people showed up at San Diego City Hall, half of them pleading with their elected leaders to shut down the short-term vacation rentals flooding their neighborhoods, the other half begging for restraint in over-regulating a home sharing enterprise they said was helping pay their bills.

This Tuesday, expect the same passionate pleas and the same deep divisions in the community as the City Council weighs two rival proposals for regulating the thousands of San Diego vacation rentals popularized by the online home sharing platform, Airbnb.

What is different this time -- following multiple hours-long public hearings — is that a majority of the council appears poised to embrace new rules that would allow short-term rentals in residential neighborhoods while imposing some limitations on investor-owned properties. And in a nod to heavily impacted beach communities, a three-night minimum stay would be required in only those areas.

Still, major challenges remain for what is being billed as a compromise approach drafted by four of the nine council members. For one, there are lingering legal questions raised by the City Attorney’s Office, plus there is still a strong constituency favoring a competing proposal by City Councilwoman Barbara Bry that would allow individuals to rent out only their primary residences and for no more than 90 days a year.

Where there is little disagreement is over the need to act swiftly on long overdue regulations of a home-sharing industry that shows no signs of slowing.

“We can't keep doing the wild, wild West, and we can't do a ban,” said Councilman Scott Sherman, one of the four council members supporting the more permissive plan for short-term rentals. Theirs is a bipartisan coalition, with Democrats David Alvarez and Chris Ward joining Republicans Sherman and Mark Kersey. Councilman Chris Cate, also a Republican, has said he is supportive of their approach.

One of the more controversial provisions, though, would allow individuals to rent out up to three properties on a short-term basis, defined as less than 30 days. Sherman said he had been opposed to any limitation while Ward had favored allowing no more than one rental per operator.

“This is a compromise in the middle,” Sherman said. “I don't think at the end of the day you're going to have an effect on the housing stock because at some point you’ll reach a point of market saturation (of short-term rentals).”

Bry counters that her colleagues’ proposed regulations are not really a compromise because they continue to encourage the operation of investor rentals that she is certain are depleting the stock of vitally needed housing.

How many such rentals would actually revert to long-term housing were they curtailed remains open to debate. Some suggest that they would simply go underground, but Bry is convinced that the competing plan will only exacerbate the city’s shortage of housing.

“Our proposal truly focuses on the preservation of housing stock,” said Bry, whose council district includes La Jolla where hundreds of homes are being rented out on a short-term basis. “We’re not producing enough housing every year, and what’s clear is every year more and more residences are being turned into short-term rentals. If something close to the Ward proposal passes, investors will come here in droves to buy homes in our single-family neighborhoods and turn them into mini hotels.”

Read more here>>

SDSU’s Mission Valley Proposal Seeks True College Campus Feel

PROPERTY: Educational And Environmental Aspects Could Be Selling Points

December 3, 2017

Source: San Diego Business Journal

By Ray Huard

San Diego — A $3 billion project proposed by San Diego State University to replace the Mission Valley site of the former Qualcomm Stadium would include a walkable campus, a new stadium, classroom buildings, retail shops and residences...

Read more here>>

How San Diego's homebuilding slump compares to the rest of SoCal

December 6, 2017

Source: San Diego Union-Tribune

By Phillip Molnar

San Diego County is on track to build fewer homes than it did last year, said permit records released this week.

Residential building permits for all homes — condos, apartments and single-family homes — are down 18 percent in the first nine months of 2017 compared to the same time last year, said the Real Estate Research Council of Southern California.

The only county with slower building was Orange County, which had a 21 percent reduction. All other Southern California counties had an increase in building in the first three quarters.

The findings come at a time when local and state politicians are adopting policies aimed at increasing residential construction as a way to slow rising prices or limit commute times for environmental reasons. A San Diego Housing Commission report in September, produced along with two city councilmen, said the city needed to triple its yearly housing production.

San Diego County had 6,054 permits issued, down from 7,412 permits from the same time in 2016. The county had produced roughly 10,000 units by the end of 2015 and 2016. To reach that number, the county would have to build nearly 4,000 homes in the last quarter of the year.

The slowdown is led by a drop in permits for multifamily construction, down by 2,209 permits, or 40 percent, compared to the same time last year.

Real estate analyst Russ Valone, president of MarketPointe Realty Advisors, said fewer new builders are coming to town because of land costs. He also noted that some lenders are wary of new projects because rent increases for high-end apartments has slowed.

“As those newer projects’ rents push into the mid-$2,000 a month range, we started to see a slowdown in the rate of increases,” he said. “I think you may have some lenders looking at the slowed increases and starting to take a cautious view of the marketplace.”

But one increase so far this year? Single-family homes are up, producing 851 more homes than the same time last year.

While the county is still on track to produce more single-family housing than last year, there will still be more multifamily housing — apartments and condos — overall, a trend not likely to be reversed as land becomes more scarce.

Borre Winckel, CEO of the local Building Industry Association, said it is very unlikely at this point that permits could catch up to previous years, already considered low because home building wasn’t keeping up with population growth.

“I would be very surprised at this point if there was a run on building” before the end of the year, he said.

Winckel said he suspects tax changes proposed in Congress, including a curtailing of the mortgage interest rate deduction, may slow interest in builders to start new projects.

Much of San Diego County’s single-family home construction has moved to Riverside County, where some San Diego workers have decided to commute from.

Riverside has issued 4,811 single-family building permits so far this year, up from 3,126 last year at the same time. Meanwhile, it has largely shied away from any multifamily development, issuing 430 permits for apartments and condos, up from 377 last year.

Low cost is likely also a factor in San Bernardino County, which has had the biggest percentage increase in home building of the seven counties at 82.6 percent. In September, San Bernardino and Riverside counties had the biggest annual home sale gains, CoreLogic said.

Los Angeles County had 7 percent more building permits issued in the first nine months compared to the same time in 2016. Both single-family (18.7 percent) and multifamily (3.4 percent) had increases.

Southern California can expect to get more housing next year, predicts three organizations included in the Research Council report. The California Association of Realtors predicted there would be 7.5 percent more permits in 2018; The California Department of Finance predicted 9.3 percent; and the UCLA Business Forecasting Project predicted 7.3 percent.

Pacific Beach Apartments Sold for $4M

December 5, 2017

Source: San Diego Business Journal

By Ray Huard

A 10-unit Pacific Beach apartment complex has been sold for $4 million.

The complex at 1435 Felspar St., has nine two-bedroom, two-bathroom apartments and one one-bedroom, one-bathroom apartment. According to CoStar, the building is 9,522 square feet and apartments average 900 square feet each.

The seller was Patricia L. Jensen Trust. The buyer was 1435 Felspar, LLC.

Gary Urtiaga of Apartment Realty Group represented the buyer. Roger Willis of Charlie Blane Realtors represented the seller.

I.B. Apartments Sell for $2.6M

November 16, 2017

Source: San Diego Business Journal

An Imperial Beach apartment building was sold by IB Properties, LLC of Coronado to Linton Dise Intervivos Trust, LLC of San Diego for $2.6 million.

The 10-unit property at 481 Palm Ave. is comprised of 10 two-bedroom, one-bathroom apartments that have been remodeled.

Upgrades included a new roof, granite counters, new flooring, stainless steel appliances and vinyl windows.

The buyer was represented by James Carter, senior partner/broker of Apartment Realty Group.

Tom Josselyn of Del Mar Financial Group represented the seller.

Report: S.D. 5th Most Expensive for Renters

November 30, 2017

Source: San Diego Business Journal

By Ray Huard

Renters looking to stretch their earnings might try El Cajon, according to a report by Zumper, a rental property search firm.

San Diego ranked as the fifth most expensive city for renters among 15 San Diego County cities surveyed this month by Zumper, with rents remaining flat at $1,650 a month for one-bedroom apartments and declining 2.2 percent to $2,250 for two-bedroom apartments.

By comparison, El Cajon was a bargain with November monthly rents pegged at $1,250 for one-bedroom apartments - a 3.8 percent drop from October. Two-bedroom apartments were priced at $1,480 a month, a 1.4 percent increase over October.

Budget renters might do well to skip Coronado, which had the highest rents in the county, according to Zumper.

One-bedroom apartments rented for $3,290 a month in Coronado and two-bedroom apartments went for $3,920 a month.

Solana Beach, as the second most expensive rental market in the county, was no bargain either, with November monthly rents at $2,410 for one-bedroom apartments and $3,710 for two-bedroom units.

“In terms of rent prices, I think Coronado and Solana Beach are experiencing a similar trend,” said Crystal Chen, Zumper marketing manager.

“Both of these cities are extremely expensive in the metro (area),” Chen said, with apartment rental rates more than $500 over what they are in other San Diego County cities and median home prices topping $1 million in Coronado and close to $1 million in Solana Beach.

The result is that “renters are being priced out and are looking for less expensive, neighboring areas,” Chen said. “This drives up prices in these close-by cities since the demand has shifted.”

For instance, rents are up nearly 10 percent for the year in Encinitas, Solana Beach’s next door neighbor.

One bedroom apartments in Encinitas were going for $1,730 in November and two-bedroom apartments for $2,800.

Just up the road, November monthly rents in Carlsbad were reported by Zumper at $1,840 for one-bedroom apartments and $2,340 for two-bedroom apartment.

In declining order, cities with lower monthly rents in November were San Diego, Poway, San Marcos, Oceanside, Vista, La Mesa, Escondido, Chula Vista, National City, Imperial Beach and El Cajon.

SDSU to Reveal Details of Plan to Expand onto Former Qualcomm Stadium Site

November 28, 2017

Source: TIMES of San Diego

By Ken Stone

SDSU President Sally Roush, site plan consultants from JMI Realty and representatives of the design firm Carrier Johnson + Culture are scheduled to hold a news conference Wednesday to reveal the overall plans for the site, which became available when the Chargers left for Los Angeles.

A group of influential SDSU alumni and supporters are collecting signatures for an initiative that would grant the school rights to the Mission Valley property.

A statement sent by Friends of SDSU to City News Service says San Diegans “have shown overwhelming support for SDSU West since we kicked off signature gathering in October. We’re right on track to achieve the goal of around 71,000 valid signatures and submit them before the end of December. This milestone will take us one step closer to making SDSU West a reality for our city and San Diego State University.”

If enough valid signatures are gathered, the initiative would likely go before voters on the November 2018 general election ballot. It would probably complete with another plan, called SoccerCity, which has already qualified for the ballot.

SDSU officials said they need to stay out of the political process for legal reasons, but have been under pressure to release details of what San Diegans could expect to go onto the site. In part because it’s only three trolley stops away from the built-out main campus, school officials have long eyed the land for expansion.

The plan is expected to include classroom and research space, student housing and a multi-use stadium. Negotiations with backers of the SoccerCity plan to develop the land and share a stadium broke down earlier this year.

On Thursday, Aztecs athletics officials are scheduled to announce details of the stadium portion of the plan. Roush, athletic director John David Wicker, football coach Rocky Long, and Scott Radecic, the founder and senior principal of the Populous stadium design firm, are scheduled to participate.

While the SoccerCity proposal calls for a soccer friendly stadium of under 30,000 seats, SDSU officials have been pushing for something closer to 35,000 for college football, with the capability of adding more later. The facility is expected to also be usable for a professional soccer franchise.

San Diego Unemployment Drops to 3.7% in October

November 17, 2017

Source: TIMES of San Diego

By Debbie L. Sklar

The unemployment rate in San Diego County dropped to 3.7 percent last month from 4.1 percent in September, according to state figures released Friday.

Employment in fields other than farm work increased from 1,443,600 to 1,457,400 in the region in that period, while agricultural employment decreased by 500 jobs from 9,400 to 8,900, according to the state Employment Development Department.

Government jobs, largely from seasonal gains in educational services, recorded the largest growth in employment with 7,100 jobs.

“With the unemployment rate near record lows, filling positions will be tough,” said Phil Blair, chief executive of recruitment agency Manpower San Diego.

The seasonally unadjusted unemployment rate in California was 4.3 percent last month, while the national rate was 3.9 percent.

San Diego County ranks No. 3 in state with life-sciences jobs

November 15, 2017

Source: San Diego Union-Tribune

By Bradley J. Fikes

Employment in San Diego County’s life sciences industry eclipsed Orange County for the first time, ranking the region No. 3 in the state, says the latest report from the California Life Sciences Association, a public policy trade group.

Employment continued to increase, while wages remained far above average, said the report, issued Wednesday.

San Diego’s life science employment of 45,959 edged past Orange County, which came in at 45,089.

In 2015, 38,685 were employed in San Diego County, for an annual growth rate of 19 percent.

Moreover, the county’s life science job growth rate surpassed that of the state by a wide margin. California’s life science industry employed 298,709 in 2016. In 2015, the industry employed 287,200, for an annual growth rate of 4 percent.

The San Francisco Bay Area and Los Angeles County remained in first and second place, with respective employment of 72,663 and 58,414. However, San Diego County’s population is far smaller than those areas, and employment is tightly clustered around La Jolla and in Carlsbad.

“San Diego has a thriving medical device industry, and it has a thriving genomics community,” said Sara Radcliffe, president and CEO of the California Life Sciences Association. “Our report shows that trend continues in terms of direct jobs.”

San Diego County’s life science employees earned an average wage of $115,500, the report found. The average wage for all jobs in the county was $56,448, according to the California Employment Development Department.

In total, more than $800 million in NIH grants were awarded in the county.The region is also projected to attract $668 million in life sciences venture funding. San Diego’s growing digital health sector is projected to attract $120 million in venture capital.

The report noted that San Diego’s life science industry is continually renewing itself. As companies get larger, or are sold, their executives constantly form new companies.

Read more here>>

Slow-Growth California Cities Get Ready for State’s New Housing Rules

September 30, 2017

Source: TIMES of San Diego

By Ben Christopher | CALmatters

The governor has signed into law more than a dozen bills to address California’s housing crisis. Now it’s up to cities and counties to begin faithfully (or maybe not so faithfully) enacting the state’s new housing agenda.

That process has already begun.

“The idea is that we have to comply with these laws of the state of California now,” said Berkeley Mayor Jesse Arreguín, whose city has been defined for years by fights between pro- and slow-development forces. “And so how can we comply…but also preserve some degree of local control?”

The tension between cities’ traditional prerogative over local land use and the state’s broader interest in more housing for dwelling-strapped California framed much of the housing debate in Sacramento this year. Now officials in San Jose, San Luis Obispo, Redondo Beach and other locales are exploring how to work within the new rules—on their own terms.

Arreguín applauds state lawmakers for finally taking action on an issue that cities have been fighting alone for years. New funding is particularly welcome. A pair of new laws offer the promise of fresh dollars for affordable housing construction via a new fee on real estate documents and a 2018 bondmeasure. Those proposals earned the plaudits of local elected leaders and governance groups across the state, including the League of California Cities.

But like most local leaders, Arreguín also has his share of reservations, especially about measures that could make it more difficult to deny new projects they disapprove of.

One will require cities that aren’t meeting their state-determined targets for housing production to offer developers an alternative, “streamlined” approval process. To qualify for fast-track treatment, new multifamily housing developments will have to meet current zoning standards, set aside a certain share of below-market units and pay their workers union wages.

How many developers will be willing to tick those boxes is unclear, but proponents call streamlining a necessary measure to bypass NIMBY obstructionism. Many cities call it a usurpation of local authority.

Another measure will make it harder for cities to deny new housing projects if they otherwise comply with local rules, and will raise the penalty for municipalities that wrongly do so.

The city of Berkeley did not officially adopt a position on either bill while lawmakers were considering them. But a local response is now in the works.

Arreguín said he is developing a Berkeley-specific streamlining process that would be available to developers in addition to the new state process. His alternative is still in its early stages, but the mayor hopes it will steer developers toward low- and moderate-income projects and those providing additional community benefits that are still undefined.

The city’s planning commission is also working on tighter zoning laws that would feature new density requirements and design standards while staying in tune with state law.

“If we set local requirements that still give the city some flexibility in shaping—not denying—but shaping projects, we can ensure compliance with [new laws] and still maintain some degree of control,” Arreguín said.

Read more here>>

San Diego County rents hit record high

October 5, 2017

Source: San Diego Union-Tribune

Average rent in San Diego County hit a record high of $1,875 last month, continuing more than six years of rising rents in a tight housing market.

Rent has increased 7.59 percent in a year, said MarketPointe Realty Advisors, which has tracked the San Diego market since 1988. While that is down from an 8.4 percent increase at the same time last year, the latest jump still outpaced home price increases and expected income growth.

"The biggest upward pressure we’ve seen in rent has been over the last two years,” said Russ Valone, CEO of MarketPointe. “It has been significant increases.”

A slowdown in new apartment construction, dropping considerably during the recession, is one factor driving up rents.

As construction has slowed, demand has increased. But when developers do build, they are constructing luxury units that command high rents and push up the average. An increasing number of townhouse rentals have also raised the average, MarketPointe said.

So far this year, 861 new apartments have come on the market, an increase from 756 total last year. Compare that to the early 2000s when builders were delivering more than 2,000 apartments a year.

Evan Morris, a real estate agent who manages a portfolio of 200 rental properties across San Diego, said he had just one unit available Thursday.

The single-family home in Talmadge, for $2,295 a month, went on the market Wednesday and had two potential renters trying to get in by Thursday.

Competition for apartments in San Diego County led to a 2.73 percent vacancy rate in September, up from 2.25 percent in March.

The average vacancy rate has been 3.15 percent since 2000. It hit a record low of 0.51 percent in 1998 and a high of 7.86 in 1988. During the recession, the highest vacancy rate was 5.26 percent in March 2009.

Read more here>>

Converting an old mining pit into 1,800 homes

October 1, 2017

Source: San Diego Union-Tribune

A 412-acre rock quarry in Mira Mesa, approved for reclamation in 1994, is being replanned to include a 25-acre community park instead of industrial development.

Lehigh Hanson, a subsidiary of Dallas-based Heidelberg Cement Group, expects to submit a new master plan for what is called “3Roots San Diego” to the city next month. It would be located between Camino Santa Fe and Camino Ruiz, south of Mira Mesa Boulevard and straddling an extension of Carroll Canyon Road.

The change in plans was driven in part by the rise of the millennial generation and their impact on housing demand. Lehigh Hanson consultant Brian Myers said residents in their early- and mid-20s may prefer downtown, North Park, Uptown and other urban neighborhoods with lively bars and a hip vibe.

“But when they get into the early family-formation years and need a place to raise their family, this is an alternative to that urban environment, yet with the urban lifestyle amenities they’ve come to enjoy,” Meyers said. “We like to refer to this community as the ‘alt-Urban’ plan.”

The assumption is that many of those downtown dwellers already have to commute north to job centers in and around UC San Diego, Torrey Pines Mesa and Sorrento Mesa. If they lived at 3Roots, they’d be home already, a future promotion might say.

3Roots San Diego, is expected to complete the first homes by 2021 if current schedules hold. That’s the same year that the San Diego Trolley’s Blue Line is scheduled to open an extension from Old Town to UC San Diego and Westfield UTC and provide a mass transit alternative to travel north and south to those job centers.

Together with the neighboring Stone Creek project to the east due to start in 2030, the two developments could boost Mira Mesa’s current population of 76,400 to nearly 95,000.

Since 1953, Carroll Canyon has been a prime source of aggregate, sand, gravel and clay for numerous construction projects.

Active mining ceased in 2016 and site resembles a treeless moonscape, gouged out by earth movers and mining equipment to extract rock and gravel for countless building sites.

Howell said the site’s red clay has been used for infield soil at many baseball fields. Concrete for freeways, hospitals, schools and other construction projects used aggregate from the Carroll Canyon mining pits.

“If we didn’t have Carroll Canyon, it could get very expensive to ship stuff in from the outside,” Howell said.

Meanwhile, planning continues on a much bigger development, Stone Creek, proposed by Vulcan Materials on 293 acres east of 3Roots. The flatter ground would accommodate up to 4,455 apartments and condos in three neighborhoods.

Stevens said that project is half what Vulcan originally proposed but is 13 years from a start date, based on the developer’s latest thinking. The final phase wouldn’t start until 2040, a Vulcan spokesman said.

Based on Mira Mesa housing counts and population, these two projects alone could boost Mira Mesa’s population from the present 76,400 to nearly 95,000 over the next 25 years.

3Roots San Diego at a glance

Location: 412 acres east of Camino Santa Fe on both sides of Carroll Canyon Road

Housing: 1,800 units, including 195 single-family homes in the Meadows district at the south end; 520 units of small-lot houses in the Canopy district at the north end; the Routes district with 340 homes; and 745 apartments, condos and affordable units in the commercial core.

Commercial: The 40-acre “Roots Collective” hub at Camino Santa Fe and Carroll Canyon Road would contain 20,000 square feet of creative office space, 120,000 square feet of retail and restaurants and a 1.5-acre transit center.

Parks: The 44 acres of parks and trails would include a 25-acre community park with play fields south of Carroll Canyon Road and four neighborhood parks. An additional 205 acres would remain as open space and slopes and Carroll Canyon Creek would be restored and realigned.

Timeline: The developer plans to submit a project application in October with environmental review completed in 2018 and City Council consideration in 2019. The first homes could be completed by 2021 with buildout by 2025.

Rents are finally flatlining in San Francisco and New York — here's what's causing it

September 22nd, 2017

Source: Business Insider

Rents are finally cooling off in some of the most expensive cities in the US.

August marked the slowest annual growth rate for rents nationally in the last three years, according to data from RentCafé.

Manhattan saw a year-over-year decrease of 2%, while average rent in Brooklyn fell 1.3%.

In San Francisco, rents decreased 0.2% year-over-year — an otherwise unremarkable drop save for the fact that rents in the metro area have almost consistently been on the rise for several years.

"We're attributing this to new inventory entering the market," Zillow's chief economist Svenja Gudell told Business Insider.

"In the last three to four years, we saw a lot more multifamily projects hitting the pipeline and in the last year and a half, we've seen significant increases in multifamily housing coming on line," she said.

Indeed, apartment construction is at a 20-year high in the US, according to property intelligence company Yardi Matrix, keeping prices level, and even down in some markets.

At the same time, rent prices are increasing in cities where high volumes of renters are moving, said Gudell, such as Seattle, Los Angeles, Riverside, and San Diego, and mid-sized cities including Sacramento, Salt Lake City, Minneapolis, Portland, Louisville, and Atlanta.

"Expensive market rents have largely leveled off over the last year or so due to the fact that they're not seeing as much in-migration — a lot of people are going toward San Francisco, but they're also leaving San Francisco — so there's reduced demand on the rental side," Gudell said.

Rents in Seattle, an increasingly popular Western tech hub, saw 7.3% year-over-year gains. Sacramento, California's capital city located Northwest of Silicon Valley, has seen an influx of tech workers in search of cheaper housing, causing rents to increase 8.2% year-over-year. Los Angeles experienced a 6.3% increase in rent prices.

That's not to say rents aren't still expensive in areas around San Francisco and New York. In fact, both cities, plus Boston, remain the priciest rental markets in the US.

But while increased apartment supply is a boon for some larger markets, a lack of single-family housing is still a problem nationwide. Coupled with slow wage growth, homeownership is no longer within reach for many Americans, especially millennials.

Though many millennials are taking longer to settle down than previous generations, for those who are ready to become homeowners, saving a down payment and securing a mortgage are two of the biggest hurdles they face, Gudell said. With rent prices leveling out in popular markets for millennials, and home prices hitting record highs, America's homeownership rate could be in trouble.

"Homeownership is a wealth generating mechanism for a lot of Americans, like a piggy bank that you put money into every month," Gudell said. Every mortgage payment a homeowner makes builds equity, like a forced savings tool, which isn't the same for renters, she added. "That's a potential lead to the wealth gap we're seeing today, and can affect wealth building."

"If you don't have a house, that forced function of putting money toward your principal isn't there, and that's a potential lead to the wealth gap we're seeing today and can affect wealth building."

Airbnb debate heats up with new proposal permitting short-term rentals

September 20th, 2017

Source: The San Diego Union-Tribune

The debate over short-term vacation rentals is intensifying this week with the release of a proposal by four San Diego City Council members that would largely permit most home sharing activities to continue, although with some restrictions.

The proposal, authored by Councilmen Chris Ward, Scott Sherman, Mark Kersey and David Alvarez, differs sharply from a proposed ordinance released last month by Councilwoman Barbara Bry that would allow homeowners to rent out only their primary residences — but not investment properties — on a short-term basis for no more than 90 days a year.

Next month, the City Council will wrestle yet again with the question of regulating short-term vacation rentals, an issue that has dogged elected leaders for 2-½ years without any resolution. It also is one that has grown more pressing with the mushrooming popularity of online platforms like Airbnb and VRBO.

The latest proposal probably comes closest to a consensus approach, although one other council member would have to sign on to reach a majority. While the proposed regulations would allow owners to rent out up to three properties on a short-term basis, a three-night minimum stay would be required in San Diego’s coastal areas as well as in neighborhoods that have been designated as a historic district.

A series of escalating fines as high as $5,000 would be assessed for noise and nuisance violations, and in a move to address the argument that short-term rentals are depleting the stock of long-term housing, the council members are suggesting a $5 nightly rental fee that would be deposited into a new affordable housing fund.

Ward, Sherman, Kersey and Alvarez say in a memo released early this week that their suggested regulations seek to balance the concerns of residents who feel their neighborhoods have been overrun by mini hotels with the desire of home-sharing hosts to earn extra income off their properties.

“As San Diego communities, we’ve been debating this for a number of years and so far there has been no hope for a pathway moving forward,” said Ward, who is leading the most recent initiative. “I understand where many on all sides are coming from but unless we can tackle some of the challenges we do agree on — the impacts on housing stock, on neighborhoods’ quality of life — the status quo will remain and that’s not working for anyone.

“I’m perfectly fine with San Diegans being able to exercise their property rights but I’m absolutely opposed to investors taking up housing stock for immediate conversion to short-term rentals. So we’ve proposed a one-year cooling-off period where you would not be able to apply for a permit unless you’ve had ownership of a property for at least one year.”

Short-term rentals, which cover periods of under 30 days, are largely unregulated in San Diego. City Attorney Mara Elliott released a formal opinion earlier this year that such rentals are unlawful because they are not identified anywhere in the city’s municipal code.

The city planning department, in preparation for an Oct. 23 hearing, has been drafting alternative measures based on three options it released earlier this year. Those now range from the most permissive to one similar to Bry’s proposal that would restrict rentals to primary residences and for no more than 90 days in one year.

The proposal by the four council members drew a measured reaction this week from Airbnb, which congratulated them for “working toward comprehensive regulations that better define short-term rentals in San Diego.”

The home-sharing giant had been much more blunt in its assessment last month of Bry’s proposal, saying it would hurt hosts’ ability to use their homes to make ends meet.

Save San Diego Neighborhoods, a coalition of residents that has fought to ban short-term rentals in single-family neighborhoods, immediately condemned the regulations proposed by Ward, Kersey, Sherman and Alvarez as a “disaster” for the city’s neighborhoods.

“I can tell you people are alarmed and the opposition to this proposal will be overwhelming,” said Pacific Beach resident Tom Coat, a co-founder of Save San Diego Neighborhoods. “I have never seen the opposition so fierce to this because they realize it doesn't protect our neighborhoods from outside investments.”

Meanwhile, Councilman Chris Cate, who has been pushing for a much more permissive approach that he first introduced two years ago, said Wednesday that the Ward-led proposal is a welcome first step toward reaching council consensus but he was not prepared yet to lend his support.

“I think this is a good start because they’re coming at this from a position where they're allowing folks to participate in the short-term rental activity as opposed to coming from the approach of how to ban certain elements of this industry,” Cate said. “Whatever we adopt we have to meet the expectations of our residents through the enforcement piece, and we don’t want to deliver false promises that we can’t enforce if we have a ban.”

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