OCTOBER 2021
SOUTH BAY NEWSLETTER MONTHLY REAL ESTATE INFORMATION
MORE YOUNG PEOPLE ARE BUYING HOMES
new california senate bills The state took a step toward creating higher-density neighborhoods as Gov. Gavin Newsom signed Senate bills 9 and 10. Senate bill 9 allows duplexes to be built in most neighborhoods across the state, including places where apartments have long been banned. Senate bill 10 reduces environmental rules on multifamily housing and makes it easier for cities to add high-density development.
There is a misconception that young people do not want to be homeowners. Research shows the opposite! More and more Millenials are purchasing their first home. So, where did this misconception come from? Well, Millenials are putting off home ownership in exchange for focusing on other lifetime achievements such as getting, married and education. The gap between first-time homeownership between generations is widening. The average first-time homeowner Millenial in 2020 was 33 years old. In comparison in 1981, the average first-time homeowner was 29. As the largest generation, millennials’ impact on the market is growing as more and more people from that generation reach homebuying age – and Generation Z isn’t far behind, either. That means younger generations will likely continue to drive demand in the housing market for years to come.
The classic California suburb of rows of houses, each with its own yard and the fence is largely a product of something called single-family zoning, a regulation that dictates that there can be only one house per parcel of land. These laws prohibit, for example, building a highrise in a residential cul-de-sac. Senate bill 9 essentially ends single-family zoning by allowing homeowners to split their lots into 2 with certain restrictions.
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A recent analysis by the Terner Center for Housing Innovation at the University of California, Berkeley, found that senate bill 9 would most likely lead to 714,000 new homes across the state over the next several years. This is just the newest addition to California's attempt to make housing more affordable. In 2017 California relaxed laws to make it easier for homeowners to convert and rent out accessory dwelling units.
Given the widespread demand and considering the number of standalone homes built during the past decade, the single-family market is estimated to be undersupplied by 4.35 million units by 2022. Price appreciation is expected to slow in 2022 when compared to the record highs of 2021. However, it is still expected to be greater than the annual average of 4.1% over the last 25 years. If you’re thinking of buying, consider buying now as prices are forecast to continue increasing through at least next year. Source: Keeping Current Matters, www.mykcm.com
HOME PRICES ARE SKYROCKETING, WILL IT CONTINUE INTO 2022?
One of the major storylines over the last year is how well the residential real estate market performed. One key metric in the spotlight is home price appreciation. The dramatic increases are seen at every price point and in all regions of the country. Prices are the result of the balance between supply and demand. The demand for single-family homes has been strong over the last 18 months. The supply of houses available for sale was near historic lows. However, there’s some good news on the supply side. Prices are the result of the balance between supply and demand. The demand for single-family homes has been strong over the last 18 months. The supply of houses available for sale was near historic lows. However, there’s some good news on the supply side. 432,000 new listings hit the national housing market in August, an increase of 18,000 over last year. There will, however, still be a shortage of supply compared to demand in 2022.
Martin barros 619.254.4007 GreaterSDRealtor@gmail.com MartinBarros.com REALTOR® | DRE #01484431
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