Bret Schanzenbach
President & CEO
Carlsbad Chamber of Commerce
On December 19, 2019 the San Diego UT reported that San Diego County’s median home price hit an all-time high of $594,455. The data, which comes from CoreLogic, represented a 5.2 percent increase from 12 months ago and it beat out San Diego’s previous high of $590k, which was achieved in June, 2019. While existing home owners are typically elated with equity growth in their homesteads, the overall impact of this trend is mixed for us here locally.
Causes of Price Increases:
There are two significant causes for the price increases. The primary cause is supply and demand. The inventory of homes available for sale on the market is declining and the demand remains high. This demand for homes in San Diego is nothing new. We have an exceptionally high quality of life and a diverse, thriving regional economy. The second factor that is leading to this price increase is the shockingly low interest rates. Interest rates are down to historic levels, and have dropped more than an entire point as compared to just one year ago. This factor is fueling the ability of some home buyers to purchase that first home or make a move up, even with the rising costs associated.
Supply Issues:
The downside of this continued escalation in prices, however, is that, despite the low interest rates, affordability is a major challenge. As the housing demand locally grows, supply has to be added to match. The State legislature is concerned as well and passed a broad measure aimed at spurring local developments. The measure was called SB 330 and despite its good intentions, it trumps local control at the city level on many issues, which always gives pause and raises some concern. When “big brother” steps in, results are rarely what they intend or hope for. All of our communities here in north county are going to have to grapple with this.
Carlsbad Supply:
Carlsbad currently has many quality residential projects that are in various stages of development. Village Lofts is a mixed-use project in the Village that will replace the old Denny’s restaurant. There will be over 9,000 sf of commercial space and 101 apartments, including affordable units. This is a transit-oriented project that will have EV charging stations and priority parking for zero and low emission vehicles. Another Village development that is also mixed-use is Grand Madison. This project will have ground floor commercial and 11 single-story townhomes. Grand Madison was so well received that it has already sold out all 11 units. A third Village development is The Carlyle, down on Grand Ave. The Carlyle will consist of 33 luxury single-level condos, 3 single-family detached homes, and 2 townhomes. Outside of the Village there are some larger developments. Poinsettia 61 – Treviso is a 123-detached condo project that is currently underway and includes a new park and 25 acres of open space. And Quarry Creek is moving toward the completion of their 636 units that have been built off the 78 freeway over the past few years.
Get Involved:
These, as well as other developments, will help add supply to the market, but the demand far exceeds what this increase can absorb. If you want to get involved and gain a voice in this ongoing discussion of creating affordable housing, the city has a Housing Commission that meets monthly. The commission meets on the second Thursday of the month at 6:00 p.m. at City Council Chambers. There are not any easy, simple solutions to this current equation, so get involved and make a difference.