Tom York on Business: Buying a Home in San Diego Got a Bit Easier This Summer
It got a little easier to purchase a home in San Diego this summer, according to a third quarter survey undertaken by the California Association of Realtors, the trade group of residential real estate brokers and agents.
But long-term affordability is slipping, in large part due to the recent dramatic run-up in housing prices.
Here in Southern California, affordability improved from the previous quarter in San Diego, as well as Los Angeles, Orange and Ventura counties.
In San Diego, 23{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} of would-be buyers could afford an average-priced home, an improvement of 1 percentage point from the previous quarter. But down from 27{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} a year ago.
Statewide only 24{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} of California households could afford to purchase the $814,580 median-priced home in the third quarter, down from 28{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} in third-quarter 2020.
The numbers are discouraging. A minimum annual income of $148,400 was needed to make monthly payments of $3,710, including principal, interest and taxes on a 30-year fixed-rate mortgage at a 3.07{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} interest rate.
CAR said 37{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} of buyers were able to purchase the $600,000 median-priced condominium or townhome. A minimum annual income of $109,200 was required to make a monthly payment of $2,730.
Compared with California, half of U.S. households could afford to purchase a $363,700 median-priced home, which required a minimum annual income of $66,400 to make monthly payments of $1,660.
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A local financial services company is apparently benefiting from the huge jump in auto prices, as buyers look for cheaper alternatives to buying a jalopy.
Credit Union Leasing of America says its portfolio has exceeded 100,000 car leases with a value of $3.8 billion, according to a news release.
That portfolio has nearly tripled in five years, as credit unions increasingly adopt indirect vehicle leasing. CULA now partners with more than 30 credit unions and has expanded its dealer network 22{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} over the last three years.
The company says current market conditions have driven new and used vehicle prices to all-time highs.
The new vehicle transaction price exceeded $45,000 in September, with used-vehicle retail prices averaging more than $25,000.
“At a time when inventory challenges remain, and new car prices continue to skyrocket … leasing could very well save the day for consumers,” said CULA spokesperson Mark Chandler.
San Diego, Los Angeles and Orange counties are among those markets with the tightest lot supply in the nation’s major markets.
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Border businesses are booming, or are they in danger of a bust?
The San Ysidro Chamber of Commerce says the local economy is getting back to normal, now that the Biden Administration is allowing vaccinated visitors to enter the U.S.
This according to a news story from NBC 7 San Diego. According to the station’s website, chamber members say that 95{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} of their customers come from Mexico, given its next-door proximity to Tijuana and Baja California.
The federal government shuttered the border due to the COVID-19 pandemic, which resulted in the closure of 275 businesses in that border community due to the lack of business.
However, despite the good news, the recent supply chain crisis has hurt the area’s businesses in terms of their recovery.
The TV station reports that the area’s small businesses “have also been disproportionately impacted by delays, shortages, and other supply chain disruptions for months now.”
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Starwood Real Estate Income Trust, managed by investment house Starwood Capital Group, says it has acquired a multifamily housing portfolio numbering 15,460 units scattered across the Southeast from San Diego-based Strata Equity Group. The REIT did not disclose the terms of the transaction.
According to a news release, the apartments are located in 27 metro areas across 10 states, primarily in southern states.
Strata is a privately held real estate investment and management company founded by Carlos Michan in 1983.
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Founders First CDC, a local nonprofit that helps diverse-led small businesses grow, has launched a $100,000 grant program to boost the fortunes of minority entrepreneurs in San Diego.
The new program hopes to help diverse small businesses create premium wage jobs in San Diego, according to the nonprofit.
Applications close Nov. 30.
The criteria for getting a grant? The agency will look closely at diverse-led businesses that generate $100,000 to $3 million in revenue and employ up to 20.
Diverse founders may be Black, Indigenous, a Person of Color, LGBTQIA+, Military Veteran, Female, or located in a low- to moderate-income area.
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LA-based Broadway Law Firm, which specializes in personal injury and family law, has opened a new office in San Diego, with a focus on motor-vehicle accident negligence.
According to the latest available data from the California Office of Traffic Safety, there were 20,270 victims — injuries and fatalities — of motor vehicle-related accidents in San Diego County in 2018.
Although the motor vehicle accident rates in San Diego aren’t as high as those in Los Angeles, law firm president Mark R. Kiran, said he saw the need to establish a legal office to support San Diegans.
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San Diego nonprofit Support the Enlisted Project is one of 53 agencies that will receive 100 one-way tickets from Southwest Airlines as part of a year-long birthday celebration for the big air carrier.
Southwest, the high-profile carrier at San Diego International, recently announced the gift to nonprofits as part of a celebration of the Texas-based carrier’s 50th business birthday.
STEP says that it builds financial self-sufficiency among junior active-duty enlisted members and recently-discharged enlisted veterans and their families facing financial crisis.
The agency also says it has served more than 5,600 hundred military families with more than $2 million in grants, and it reports that 94{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} of those help have not returned for additional help.
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Despite shortages threatening to disrupt the retail economy, holiday shoppers have no plans to change their buying patterns.
San Diego cross-marketing platform Cordial has found that most consumers are not shopping earlier this holiday season, despite widespread concerns about product availability and shipping delays.
This according to the results of a recent survey published on PRNewswire.
The poll of 1,002 people conducted earlier this month indicates a significant disconnect between consumer concerns over supply chain issues and early-shopping decisions:
While more than 70{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} of consumers are concerned that online orders won’t arrive in time for the holidays, 41{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} have not started any shopping at the time of the survey, with just 20{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} having done “most” or “all” of their seasonal purchasing.
More than half of consumers expect to spend similar amounts as in recent years on these traditional blockbuster sales days, with 26.3{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73} expecting to shop more than in the past, and 22{3e92bdb61ecc35f2999ee2a63f1e687c788772421b16b0136989bbb6b4e89b73}, saying they’ll spend less.
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Finally, this bit of holiday cheer.
Amazon — yes, that Amazon! — will host a two-day “Shop Local” event in downtown San Diego Nov. 20-21 to display the goods of 10 San Diego retailers and other businesses selling in Amazon’s store this holiday season.
The event will be held at Sparks Gallery in the Gaslamp district, and will feature ten local small businesses, including Uncle Keith’s Gourmet Foods, a family-run business that sells seasonings, marinades, condiments and hot sauces and which has the distinction of being Black-owned, family-owned, woman-owned, and veteran-owned.
The business was co-founded by Keith and Crystal Fairley. Keith is a retired Navy chief and Crystal is an Air Force veteran.
Other businesses that will participate include PupLid, which sells custom-designed hats for dogs, and Game That Song, which sells party games for music lovers created by Eric Richardson while coaching sporting events for his two children.
To get a list of the 10 businesses participating in the event, click here: amazon.com/ShopLocalSanDiego.
Tom York is a Carlsbad-based independent journalist who specializes in writing about business and the economy. If you have news tips you’d like to share, send them to [email protected].
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