If you are trying to buy or sell a home in San Diego, you are probably well aware that the city—not to mention the state as a whole—is facing a severe housing shortage. With unemployment rates lower than they were a few years ago, more people in the area are looking to purchase real estate, but there are not enough houses and apartments to meet that demand.
In 2017, pressure was high to construct new homes. Despite that fact, the Real Estate Research Council of Southern California reports that there were actually fewer building permits issued than there were the year before by 4%.
Housing construction was slower during the beginning part of 2017, but sped up toward the end of the year. The decline was actually only in the construction of new apartments and condominiums; single-family homes saw an increase over the previous year.
The vast majority of the new apartments being built are in the downtown area—around 80%. It is easier to get projects approved for downtown, because people there expect dense housing. In other communities, they are more likely to reject proposals. Nonetheless, these communities may need to change their tune to satisfy Senate Bill 35.
San Diego and Orange County were the only two counties in Southern California that saw a decline in building permits issued last year. Reasons cited for the decrease include rising costs for construction and declining availability of labor.
The ongoing housing shortage in San Diego will likely continue to drive up prices for real estate throughout the county. That is good news if you are thinking about selling anytime soon. If on the other hand you are buying, it means you will need to shop around to find the best housing prices—but your purchase of a home now may act as a good investment vehicle over the coming years.