Statewide there is an overall shortage of middle and low-income housing
■ Matt McPherson / Columnist
Throughout California and the country, a severe lack of affordable homes and apartments for middle class and low income families is driving existing home prices skyward. In California, the median home price of $500,000 is twice the national average. With the lack of new housing, construction, prices are expected to continue rising.
According to The New York Times, lawmakers in Sacramento are pursuing extraordinary legislation in an attempt to “crack down” on communities that have systematically recessed or stymied housing construction proposals, often at the request of local neighborhood groups.
Last month, a bill was passed by the California Senate and is now part of a broad package of housing proposals currently in negotiations between Gov. Jerry Brown and Democratic legislative leaders. This month it was announced that the proposals would likely be voted on in some form or another later this summer.
Scott Weiner, a democratic senator from San Francisco who sponsored the bill, had this to say: “The explosive costs of housing have spread like wildfire around the state. This is no longer a coastal, elite housing problem. This is a problem in big swaths of the state. It is damaging the economy. It is damaging the environment, as people get pushed into longer commutes.”
The state of California’s economic boom seems to be the primary factor contributing to the housing crisis. A combination of employment surging and tax revenues rising are running up against 30 years of resistance towards crucially needed housing development. The allure of California with its pleasant weather, miles of coast, and thousands of destinations have created a huge demand from home buyers that just can’t be met.
The cities of San Jacinto and Hemet have recently relaxed their permitting and other requirements for developers in an attempt to stimulate new construction, especially affordable homes and apartments for the working class. Dozens of housing and apartment projects are moving forward throughout the valley with commercial developers closely watching and waiting to initiate more shopping centers to cater to the expected growth.
Looking at the Area Price Comparison chart (APC) it’s evident that prices and equity continue to rise at a very robust rate throughout the Valley. Hemet valuations are up nine percent over last year at this time, while San Jacinto values are up a whopping 13 percent. Supply, however, is struggling to reach demand with only 250 properties sold in Hemet in June 2017 compared to 253 in June 2016. In June, San Jacinto saw an increase of 11 properties sold over the June 2016 figures. Once the large developments throughout the Valley reach fruition, you can expect to see prices plateau and even decrease once the demand for housing is slowly met.
Matt McPherson is a licensed real estate agent with Coldwell Banker Associated Brokers and can be reached at MattMcPh@ColdwellBankerAB.com or by calling 951-315-7914.