The Senate has just passed the Coronavirus aid, relief and economic security (CARES) Act, a stimulus package that will provide assistants to Realtors.   C.A.R. is closely monitoring the legislation.   Review CAR's update here.

C.A.R. has issued guidance on the Governor's stay at home order.  This is not guidance from PSAR or our Board of Directors.  CAR has a legal team that is qualified to interpret and opine on legal matters.  Please consult your own legal council for advice and consult.  PSAR, CAR and NAR leaders continue to communicate with officials to educate them about the real estate business in this time of crisis.  

For more information please follow this link: 

The Pacific Southwest Association of REALTORS® (PSAR) and the North San Diego County Association of REALTORS® (NSDCAR), two real estate trade associations for San Diego-area REALTORS®, are proud to jointly announce the availability of a new Local Area Disclosures (LAD) publication covering San Diego County.

This new LAD publication will help REALTOR® members give consumers a deeper understanding of the properties in San Diego County communities where they are purchasing. It contains vital information relating to all local communities in the San Diego region. The new LAD is the latest member benefit and is demonstrating a dedication and commitment to address the local needs of REALTOR® members.

NSDCAR and PSAR leading brokers and legal counsel worked together to create this new version that will provide REALTORS® with a disclosure document that focuses on items that may concern their clients and that are especially, and in many cases, unique to San Diego County.

For consumers, this new LAD will provide important information on all pertinent issues relating to a property they are interested in. It also will help buyers not rely solely on information received from sellers and agents.

“It was a very rewarding, collaborative experience working with our REALTORS® on this LAD project,” said Rich D’Ascoli, CEO, PSAR. “Our team members developed close bonds with a sense of expertise and camaraderie on this project, all with the goal of empowering our members to succeed.”

“Brokers want to provide their clients with accurate and current information,” said Tommy Thompson, CEO, NSDCAR. “Real estate dealings come with potential legal risk. So, disclosure of information is key to our jobs of informing buyers about the exact condition of a property before they agree to purchase it. Keeping tabs on legal concerns in day-to-day dealings help our members safeguard their reputations, businesses and careers.”

Disclosures are one of the most important areas in today’s real estate industry. Full disclosure provides parties with the information needed to properly negotiate price and assess the property’s suitability for their needs.

All sellers are required to disclose certain information and material facts, including information on the property including known hazards and defects that could have an effect on a buyer’s decision to enter into the deal.

In addition, all REALTORS® are required to have a thorough knowledge of California real estate disclosure laws. A real estate professional has a fiduciary duty to disclosure any information that might impact the value of a sale. It is always in your best interest to disclosure all known and suspected hazards. If information is withheld, the buyer or seller may be entitled to damages.

The new LAD publication is presented in easy-to-read format with chapter sections with such titles as “General Disclosures,” “Environmental Disclosures,” “Traffic, Roads and Transportation Disclosures” and “Air Traffic and Airport Disclosures.” Another section called “Specific Area Disclosures” includes specific information on particular communities in San Diego County, including coastal and desert areas, as well as North County, East County, South County, City of San Diego areas.

Topics for the sections include the following:

-- General Disclosures: County of San Diego General Plan Update, Homeowner Associations, High Wind and Flooding areas, Prison and Jails, Attractions and Amusement Parks, Casinos, Historic Districts, Short-term Rental Restrictions, Parking Restrictions, Soil Conditions, Gas Pipelines, Proposition 65.

-- Environmental Disclosures: Hazardous Materials, Coastal Cliffs, Electrical and Magnetic Fields, Flooding Valleys, Landfills, Lead-based Paint, Nuclear Materials, Agricultural Lands, Toxic Mold Advisory.

-- Traffic, Roads and Transportation: Major Freeways, Mass Transit, Buses.

-- Air Traffic and Airport Disclosures: Aircraft Noise, Airport Sites and Runway Expansion, Military Airfield Restrictions.

A variety of topics are mentioned on the pages about specific San Diego County communities, including information about off-road vehicles activity, nearby farms and agricultural odors, equestrian areas, sewage plants, groundwater seepage, landslide incidents, military ordinances in canyons, quarry noise and facilities for homeless and transients.

The new LAD publication will be available to members on the PSAR and NSDCAR websites.

About PSAR
The Pacific Southwest Association of REALTORS® (PSAR), a 3,100-member trade group for San Diego-area REALTORS®, offers CRMLS multiple listing services, educational training, advocacy and other resources to its REALTOR® members. Founded in 1928, PSAR has played a significant role in shaping the history, growth and development of greater San Diego County. The Association maintains a leadership role in the industry, empowering REALTORS® by leveraging our collective strength so they may serve homebuyers and sellers and the greater community. PSAR offices are located in Clairemont, Chula Vista, and El Cajon. PSAR Service Centers provide Sentrilock, Supra, retail store, MLS training and REALTOR® education, networking and much more. For more information, visit www.PSAR.org.  

About NSDCAR
The North San Diego County Association of REALTORS® (NSDCAR), a 7,000-member trade group for San Diego-area REALTORS®, offers San Diego County REALTORS® access to the California Regional MLS (CRMLS) service, along with educational training, advocacy and other services and resources. NSDCAR is the largest trade association in San Diego’s North County Region. Service centers are located in Vista, Carmel Valley, Carlsbad, Escondido, Fallbrook and Kearny Mesa. NSDCAR was founded in 1994 when several small boards of REALTORS® joined forces to better serve REALTORS® and real estate consumers in the rapidly growing areas of North San Diego County. For more information on NSDCAR, visit www.NSDCAR.com.

CRIME PREVENTION FOR REALTORS® - Learn the strategies and
techniques that will help keep you safe.

Tuesday | September 17
South PSAR | 1:00pm - 3:00pm

Crime Prevention Specialist Angela Gaines has two decades of working in law Enforcement, first with the Lemon Grove Sheriff station , and for the last 13 years with the Chula Vista Police Department. Training will be fun and interactive.

Free Workshop Will Cover

Parking lot & vehicle safety tips
Safety strategies
Tricks to remain aware 
Learn to trust your gut Instinct
Personal security devices

Here’s news about another recent PSAR success: Once again, PSAR leadership has made a significant contribution that will result in additional housing availability and improved affordability for the San Diego real estate market.

Over the past two years, PSAR has been working closely with the City of San Diego on rules and regulations relating to what’s called “Companion Units.” While other governmental agencies call them “granny flats” or “accessory dwelling units” (ADUs), the City of San Diego calls them companion units.

Companion units, typically smaller than standard homes, are second units built on the same lot as an existing single-family home. Often, these secondary units are constructed in backyards or above garages of single-family residences. They can be used by family members or rented to seniors, students or others and can provide a source of income for homeowners. PSAR is in support of property owners expanding the use of their property as a way to address the region’s housing supply and affordability crisis.

PSAR’s participation with the City of San Diego recently culminated with the city's publication of the “Companion Unit Handbook,” a 38-page booklet that serves as a helpful guide to homeowners seeking to construct a companion unit on their property.  The handbook can be accessed here, CLICK HERE.

The handbook includes information on zoning, including setbacks and parking, companion unit design and construction, permitting requirements, funding options and additional resources. The handbook answers many popular questions relating to companion units, including: what is a companion unit and where is it allowed; what are the best sources for design of a companion unit; how does one make sure they’re well prepared; ideas and inspiration for the design of a companion unit; the construction and budgeting process; costs, timing and financial sources; impact on your property taxes; what is needed for permitting and occupancy.  

“It hasn’t been easy to make progress over the past two years, but it’s been very rewarding,” said Rafael Perez, PSAR REALTOR® member who has been leading the PSAR efforts with the City of San Diego.

“From the beginning, we brought a REALTORS® perspective to the table,” Perez said. “At first, some of the people at the city had not considered how companion units could change how homebuyers view their future purchase or how existing homeowners could increase their equity. So, we were able to help shape the regulations to benefit the city and homeowners and buyers.”

PSAR’s name appears on the cover of the city’s “Companion Unit Handbook” as a contributor to the publication, along with the San Diego Housing Federation and Local Initiatives Support Corporation (LISC). PSAR’s name also is appearing in a press release announcing the availability of the handbook that is being distributed by San Diego City Council member Scott Sherman.

“Personally speaking, I have been very grateful to receive input from PSAR,” said Sherman. “PSAR members have direct experience at helping their clients with companion units. So, it made sense to follow their advice in the writing of the handbook as we continue to seek workable, common sense solutions to fixing the housing crisis.”

Sherman agreed the handbook will serve as a helpful guide to help homeowners better navigate the process of construction a companion unit on their property.

“The design and construction of a companion unit is a step-by-step process. And, success often depends on preparation and a solid understanding of the process,” said Sherman. “For anyone who is considering building or adding a companion unit on a property, this handbook will be very helpful.”

Sherman added, “In a region where average rent is nearly $1,800 a month and the median price of a home is over $500,000, renters are actively seeking alternative options for affordable rent. In addition, homeowners are seeking alternative options in order to offset the cost of a home mortgage. Companion units can provide an immediate solution to the region’s housing supply crisis.”

Perez said, “Unfortunately, limited housing supply paired with limited construction of affordable for-sale housing units has put a severe strain on lower and middle class families. The ‘missing-middle’ forces families seeking the American Dream to make tough decisions to live on tight budgets or move out of the region. Making it easier to build companion units will help create options for more affordable homeownership as well as increase the supply of affordable housing units in our region.”

Granny flats, or companion units, represent perhaps the easiest and quickest way to provide additional affordable housing options to local residents. When it comes to housing that will help all of San Diego, PSAR is in favor of making the rules more streamlined and cutting through the thick red tape of processing the construction of new smaller rental units.

Current state regulations allow granny flats up to 1,200 square feet in size. They can be attached to, or built separate from, full-sized homes on the same parcel, and include kitchens, bathrooms, living areas and private entrances. They cannot be sold as individual homes, but they can be rented out by homeowners or used to provide additional living space for family members, friends, students, the elderly, the disabled, or in-home health care providers. Properties must meet all zoning requirements, such as setbacks that meet fire safety and building codes.

PSAR previously assisted the County of San Diego and the cities of Chula Vista and La Mesa with the creation and formation of ADU regulations.

PSAR members worked closely with the City of Chula Vista to reduce ADU fees and streamline their regulations. In the East County, following input from PSAR, La Mesa’s set of regulations for granny flats will, in some cases, enable the city to provide more options than do state requirements.

Meanwhile, at a County Board of Supervisors meeting held earlier this year, the Supervisors were considering a modification to their ADU code to require owner occupancy for an additional building on a lot, which PSAR recommended against. Fortunately, the Supervisors decided to remove the owner-occupancy requirement following PSAR testimony from Tracy Morgan Hollingworth, PSAR’s Government Affairs Director.

“I don’t know of any other local real estate organization that has given their support to these local jurisdictions like PSAR has,” said Robert Calloway, 2019 PSAR President. ”I’m very proud that these government bodies have turned to PSAR for assistance and agreed with our recommendations.”

San Diego County’s housing prices in May were relatively flat in a year-over-year comparison, as were home sales and prices, according to the latest housing market report from the California Association of REALTORS® (C.A.R).

The median price of an existing single-family home in San Diego was $650,000 in May 2019, compared with $649,000 in April 2019, a difference of only 0.2 percent, and higher by 1.6 percent in a year-over-year comparison with the $640,000 figure from May 2018.

The San Diego County home sales total in May 2019 was 7.9 percent higher from April 2019, but only 0.2 percent higher than May 2018.

Statewide in May 2019, California’s median home price edged higher to another peak for the second straight month as lower interest rates helped bolster home sales. The statewide median home price reached another all-time high in May, hitting $611,190. It was a 1.4 percent increase from the $602,920 median price registered in April 2019, and a 1.7 percent rise from the $600,860 price in May 2018.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 406,960 units in May 2019, according to information collected from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the May pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

May’s statewide sales figure of 406,960 represented a 2.6 percent increase from the 396,780 level in April 2019 and a 0.6 percent decrease from home sales in May 2018 of 409,270. Sales rose above the 400,000 benchmark for the first time since July 2018 and reached the highest level in 11 months, while the year-to-year sales dip was the smallest in 13 months.

“The lowest interest rates in nearly a year and a half, no doubt, have elevated housing demand as monthly mortgage payments have become more manageable to home buyers in general,” said C.A.R. President Jared Martin. “The state’s housing market remains soft, however, as home sales continue to lag behind last year’s level for more than a year now.” 

“While lower interest rates have spurred buyer demand in recent months, they also have played a role in ongoing price hikes,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “Buyers could offer higher prices without hurting their bottom lines and maintain the same level of affordability, as rates remain on a downward trend. With mortgage rates expected to stay low in the upcoming months, home prices may inch up further for another month or two before cooling off.” 

Other key points from the May 2019 resale housing report included:

-- Home prices increased in all counties in Southern California, except for Ventura, which dipped 1.6 percent.

-- Active listings in May 2019, which have been decelerating since December 2018, continued to climb from the prior year, increasing 7.4 percent from a year ago. It was the 14th consecutive year-over-year increase but also the first single-digit gain since last June.

-- The Unsold Inventory Index (UII), which is a ratio of inventory over sales, was lower in May than April’s level, suggesting that the typical seasonal pattern of rising home sales are beginning to play out this year. The UII was 3.2 months in May 2019, down from 3.4 months in April 2019 but up from 3.0 months in May 2018. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate. The jump in the UII from a year ago can be attributed to the mild sales decline and the sharp increase in active listings.

-- The median number of days it took to sell a California single-family home is increasing. Time on market fell from 21 days in April 2019 to 18 days in May 2019 as the homebuying season got underway. It took a median number of 15 days to sell a home in May 2018. Meanwhile, in San Diego County, it took only two weeks to sell an existing single-family home in May 2019. The median number of days a home remaining unsold on the market stood at 14 days in May, compared with 17 days in April, 19 days in March, 22 days in February and 13 days in May 2018.

-- The statewide sales-price-to-list-price ratio was 99.3 percent in May 2019, compared to 100 percent in May 2018. Sales-to-list-price ratio is an indicator that reflects the negotiation power of home buyers and home sellers under current market conditions. The ratio is calculated by dividing the final sales price of a property by its last list price and is expressed as a percentage. A sales-to-list ratio with 100 percent or above suggests that the property sold for more than the list price, and a ratio below 100 percent indicates that the price sold below the asking price.

-- The statewide price-per-square-foot average for an existing, single-family home statewide reached $292 in May 2019, up from $286 in May 2018. The May 2019 figure was the highest level since late 2007.

-- The 30-year, fixed-mortgage interest rate averaged 4.07 percent in May, down from 4.59 percent in May 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate increased in May to an average of 3.65 percent from 3.79 in May 2018.

In other recent real estate and economic news, according to news reports:

-- According to real estate tracker CoreLogic, the San Diego County median home price stayed at $570,000 in May, the same as it was last May. Home prices reached a peak in August 2018 of $584,750, but prices have mostly leveled off as sales have started to decline.

-- According to the most recent S&P CoreLogic Case-Shiller Indices, home prices in San Diego County rose 0.5 percent in April, after a 1.1 percent increase in March and 1.0 percent rise in February. Prior to February, local home prices had declined for six straight months. It was the first time since 2012 for annual home price gains in San Diego to be below 1 percent. Because of the six-month downward trend, San Diego home prices are up only 0.8 percent over the past year, compared to the national average of 3.5 percent. The nationwide 20-city composite posted a 2.5 percent year-over-year gain in April.

-- According to Redfin, San Diego County had the third lowest homeownership rate for single mothers in the U.S. in 2017. In the latest figures available, only 22.4 percent of single mothers owned a home in San Diego County in 2017, according to the report. This is compared to an overall San Diego homeownership rate of 53 percent.

-- According to ClosingCorp., a San Diego-based provider of residential real estate closing cost data, the average closing costs on a home purchase in California last year was $6,765, nearly $1,000 more than the national average. The report assumed an average single-family home sales price between $600,000 and $700,000 and included taxes. The average closing cost without taxes was $5,284. The national average home closing cost in 2018 was $5,779 including taxes, and $3,344 excluding taxes. The average closing costs with taxes works out to slightly more than 1 percent of the sales price.

-- According to the 2019 Home Affordability Report, on a nationwide basis, it takes 14 years to save for a 20 percent down payment on a median price home for those earning the median income. In San Diego, it takes 31 years. The least affordable cities with rankings of 30 years or longer include Boston (30 years), San Jose and San Diego (31 years), Miami and Manhattan (36 years), Honolulu and San Francisco (40 years) and Los Angeles (43 years).

-- According to Zumper, an online rental company, San Diego was the 11th most expensive U.S. city for renters in June, with a typical one-bedroom apartment going for $1,710 per month. The monthly payment figure for June was actually 7.7 percent lower than the same month a year ago.

-- According to Qualify of Life Dashboard, a research company, the quality of life in San Diego is improving in six areas, but declining in four. The six areas of improvement include air quality, electricity use, electric vehicles, employment, entrepreneurship and renewable energy. The four areas of decline include housing, traffic congestion, waste and water use.

-- First American Financial Corp.’s national mortgage loan application defect index declined for the first time in eight months in April. The report still found the defect index was up by 11 percent year-over-year, however, indicating there is plenty of room for improvement. In contrast to the national statistics, San Diego saw its mortgage defects decline by 4.3 percent in a year-over-year comparison.

-- San Diego County’s unemployment rate fell to 2.8 percent in May, matching the county’s lowest unemployment rate for any month since at least June 2017, according to the California Employment Development Dept. The county’s unemployment rate fell two-tenths of a percent month-over-month, from a seasonally adjusted 3 percent in April to 2.8 percent last month. At this time last year, the county’s unemployment rate also fell to 2.8 percent before spiking above 3.5 percent in June.

California home sales fell to the lowest level in more than 10 years in January 2019, according to the latest housing market report for home sales and prices from the California Association of REALTORS® (C.A.R). Housing demand in the state remained subdued for the ninth consecutive month in January as economic and market uncertainties sent home sales to their lowest level since April 2008, said C.A.R.

Existing, single-family home sales statewide totaled 357,730 in January on a seasonally adjusted annualized rate, down 3.9 percent from the revised 372,260 in December and down 12.6 percent from January 2018 of 409,520. January marked the ninth consecutive month of decline and the sixth month in a row that sales were below 400,000, dipping to the lowest level since April 2008.

Sales in San Diego in January 2019 were down 17 percent from December and 10 percent lower from January 2018, according to C.A.R.

Closed escrow sales of existing, single-family detached homes in California totaled a seasonally adjusted annualized rate of 357,730 units in January, according to information collected by C.A.R. from more than 90 local REALTOR® associations and MLSs statewide. The statewide annualized sales figure represents what would be the total number of homes sold during 2019 if sales maintained the January pace throughout the year. It is adjusted to account for seasonal factors that typically influence home sales.

“California continued to move toward a more balanced market as we see buyers having greater negotiating power and sellers making concessions to get their homes sold as inventory grows,” said C.A.R. President Jared Martin. “While interest rates have dropped down to the lowest point in 10 months, potential buyers are putting their homeownership plans on hold as they wait out further price adjustments.”

C.A.R. said the statewide median home price declined to $538,690 in January 2019, which was down 3.4 percent from $557,600 in December and up 2.1 percent from a revised $527,780 in January 2018.  

In San Diego County in January 2019, the median home price was $610,000, which was 1.4 percent lower than the $618,500 figure for December 2018 and 3.4 percent higher than the $590,000 figure for January 2018.

“While we expected the federal government shutdown during most of January to temporarily interrupt closings because of a delay in loan approvals and income verifications, the impact on January’s home sales was minimal,” said C.A.R. Senior Vice President and Chief Economist Leslie Appleton-Young. “The decline in sales was more indicative of demand side issues and was broad and across all price categories and regions of the state. Moreover, growing inventory over the past few months has not translated into more sales.”

Other key points from C.A.R.’s January 2019 resale housing report included:

-- The median number of days it took to sell a California single-family home rose from 27 days in January 2018 to 37 days in January 2019, compared to 32 days in December 2018. Meanwhile, in San Diego County, the median number of days a home remained unsold on the market rose from 21 days in January 2018 to 28 days in January 2019, compared to 27 days in December 2018. 

-- Statewide active listings rose for the 10th consecutive month in January after nearly three straight years of declines, increasing 27 percent from the previous year. All major regions recorded an increase in active listings, with the Bay Area posting the highest increase at 57 percent, followed by Southern California (29.7 percent), Central Valley (19.5 percent) and the Central Coast (14.5 percent).

-- The Unsold Inventory Index (UII), which is a ratio of inventory over sales, increased year-to-year from 3.6 months in January 2018 to 4.6 months in January 2019. The index measures the number of months it would take to sell the supply of homes on the market at the current sales rate. The jump in the UII from a year ago can be attributed to the double-digit sales decline and the sharp increase in active listings.

-- Forty of the 51 counties reported by C.A.R. posted a sales decline in January with an average year-over-year sales decline of nearly 19 percent. Twenty-eight counties declined by double-digits on an annual basis, and 10 counties experienced an increase in sales from a year ago.

-- The 30-year, fixed-mortgage interest rate averaged 4.46 percent in January, up from 4.03 percent in January 2018, according to Freddie Mac. The five-year, adjustable mortgage interest rate also increased in January to an average of 3.91 percent from 3.47 from January 2018.

In other recent real estate and economic news, according to news reports:

-- A new LendingTree report found that 63 percent of homebuyers in San Diego County last year shopped around for a mortgage before settling on a home. The report also found that just 39 percent of the buyers had good or excellent credit, and the typical down payment was 12 percent of the purchase price. LendingTree ranked the 50 largest metropolitan areas in the U.S. based on an average of the city’s rank in three categories that contribute to the competitiveness of homebuyers in an area. Based on shopping for a mortgage, credit and the down payment percentage, Denver, Los Angeles, and Portland, Ore., have the most competitive buyers in the country. Buyers in these areas have higher than average credit scores and the ability to put down a larger down payment.

-- San Diego's Real Housing Price Index declined at the fifth fastest rate nationwide in November 2018 at 0.1 percent, according to First American Financial Corp. While the decline may seem marginal, the rate of that drop was exceeded only by San Jose (with a 0.7 percent decline), Boston (0.4 percent), Portland, Ore. (0.2 percent) and Pittsburgh (0.2 percent). Seattle tied San Diego with a 0.1 percent decline. 

-- According to S&P CoreLogic Case-Shiller, San Diego’s home prices rose 3.32 percent in 2018, the third slowest of the 20 cities covered by the index. National home prices were up 5.2 percent in a year, with Las Vegas leading the pack with a 12 percent gain.

-- According to a Zillow report, San Diego County experienced the third-highest year-over-year jump in housing inventory in the U.S. in January. Zillow said San Diego saw its year-over-year “for sale” inventory climb 31.9 percent in January to 9,810 units. Inventory has increased the most in five West Coast markets, giving home shoppers more options and ever-so-slowly tilting the market toward buyers, Zillow said. On an annual basis, inventory grew 42.9 percent in San Jose, 36.9 percent in Seattle, 29.1 percent in Los Angeles and 25 percent in San Francisco.

-- Also according to Zillow, a declining percentage of existing homes have been selling above the asking price nationally and San Diego County is no exception. Zillow found that just 17.4 percent of existing homes in San Diego County sold above their asking price in November 2018, and just 16.4 percent sold above their asking price in December 2018. An average of 29.9 percent of existing homes sold above their asking price in San Diego County in 2017, while that number dropped to 25.7 percent in 2018, Zillow said.

-- According to Redfin, San Diego County was the third least affordable housing market in the U.S. for millennials in 2018. While the median household income for a San Diego millennial was $78,433, the median priced home was only affordable to 24.3 percent of those households, Redfin found.

-- Also according to Redfin, home affordability is declining in San Diego despite more inventory. Redfin reported there were 10 percent more homes for sale in San Diego County in 2018 compared to 2017, but the number of affordable homes for sale fell 16 percent. The number of homes affordable to a San Diego household earning the median income in 2018 dropped to 22 percent. Redfin also said more users conducted online searches for San Diego homes than searches by local residents for homes outside the county in 2018.

-- Quinnipiac University's recent California-specific poll, conducted Jan. 30 to Feb. 4, recently found that 43 percent of the 912 Californians surveyed said they don’t make enough money to live in the state. Also, Quinnipiac found that well over half of younger California voters, 61 percent of the respondents 18 to 34 years old, say they can’t afford to live in the Golden State.

-- The U.S. unemployment rate has dropped to 3.7 percent, the lowest in nearly 50 years, according to the Bureau of Labor Statistics. Also, average earnings rose 8 cents, to $27.24 per hour in September 2018.

Lower seasonal home prices allowed more Californians to afford a home purchase in the fourth quarter of 2018, compared to the previous quarter, but higher interest rates pushed affordability lower compared to the previous year, according to the California Association of REALTORS®’ (C.A.R.) “Housing Affordability Index” (HAI).

C.A.R. said 28 percent of California households could afford to purchase the existing $564,270 median-priced home in the fourth quarter of 2018, which was up from 27 percent in third quarter of 2018 but down from 29 percent a year ago.

In San Diego County, only 24 percent of local households could afford to purchase the $625,950 median-priced home in the 2018 fourth quarter, up from 23 percent in the 2018 third quarter but down from 26 percent a year ago. 

"Affordability has been challenging the past few years in San Diego County. We’re facing a soft market right now in San Diego as prices remain flat while some buyers are remaining on the sidelines,” said Robert Calloway, 2019 PSAR President. “However, the market fundamentals, such as job growth, income growth and household formation, are still strong. Mortgage rates are down slightly and buyers are looking for deals because the time on market has gone up which has increased the housing supply, but they're no longer fighting each other tooth and nail to get in the front door.”

C.A.R. said its index has been below 30 percent for six of the past eight quarters. California’s housing affordability index hit a peak of 56 percent in the first quarter of 2012.

C.A.R.’s HAI measures the percentage of all households that can afford to purchase a median-priced, single-family home in California. The index is considered the most fundamental measure of housing well-being for homebuyers in the state.

To afford to qualify to purchase the statewide median-priced, single-family home of $564,270 in the fourth quarter 2018, a household would need a minimum annual income of $122,340 to make the necessary monthly payments of $3,060. The monthly payment, including taxes and insurance on a 30-year, fixed-rate loan, assumes a 20 percent down payment and an effective composite mortgage interest rate of 4.95 percent. The effective composite interest rate was 4.77 percent in third-quarter 2018 and 4.17 percent in fourth-quarter 2017. 

In San Diego County, C.A. R. said a minimum annual income of $135,710 would be needed to make monthly payments of $3,390 on a 4.95 percent interest rate mortgage loan.

“One of the biggest things with the affordability of homes here in San Diego is typically household income levels, but we’re in a more favorable position when compared to other markets like the Bay Area and the Silicon Valley,” said Calloway. “Too many builders have focused on luxury homes, and there hasn't been enough construction of affordable starter homes. Fortunately, recent inventory increases and the slowdown in house price appreciation is good news for home buyers.”

C.A.R. also said housing affordability for condominiums and townhomes edged up in fourth-quarter 2018 compared to the previous quarter with 37 percent of California households earning the minimum income to qualify for the purchase of a $460,000 median-priced condominium/townhome, up from 36 percent in the third quarter. An annual income of $99,730 was required to make monthly payments of $2,490. Thirty-eight percent of households could afford to buy a condominium-townhome a year ago.

Compared with California, more than half of the nation’s households (54 percent) could afford to purchase a $257,600 median-priced home, which required a minimum annual income of $55,850 to make monthly payments of $1,400.

Other key points from C.A.R.’s fourth-quarter 2018 Housing Affordability report included:

-- Housing affordability improved from fourth-quarter 2017 in 10 tracked counties and declined in 30 counties. Affordability in eight counties remained flat.

-- All but one county in the Southern California region posted a decrease in affordability compared to a year ago. Affordability declined in Los Angeles, Orange, Riverside, San Bernardino and San Diego counties. Only Ventura County recorded an improvement.

-- During the fourth quarter of 2018, the most affordable counties in California were Lassen (66 percent), Kern (53 percent) and Kings and Siskiyou (both at 50 percent). The minimum annual income needed to qualify for a home in these counties was $52,030 or less.

-- Mono (12 percent), Santa Cruz (12 percent), San Mateo (15 percent), San Francisco (15 percent) and Santa Clara (18 percent) counties were the least affordable areas in the state. San Francisco and San Mateo counties had the highest minimum qualifying incomes in the state. An annual income of $326,290 was needed to purchase a home in San Francisco County, and an annual income of $329,300 was required in San Mateo County.