The American economy today is on fire. GDP is over 4% with nearly 5 million net new jobs added to the work force. Unemployment is under 4% and wages across the board are up 2.8 percent in the last 12 years. All diverse groups are seeing unemployment number to depths never recorded. These are the facts but there is more. The stock market is close to an all-time high which is pushing wealth in this nation to over $100 trillion dollars. The median home price has risen 40% over the last five years. Where are the Chula Vista/San Diego buyers?
That is a lot of statistics showing the booming economy. Why then are home sales down 1 percent from August of 2017? In a recent survey, 38.5% of those surveyed expressed that it was a good time to buy which was a 5% drop from the previous year. Homebuyer sentiment is cooling in recent months but why? What is behind this mismatch of strong economy and slowing buyer participation?
It’s my opinion that Chula Vista/San Diego homes are too expensive for many potential buyers. The best remedy is to build, build and build some more. Earnings and home prices need to be better aligned. We need to push our local authorities including Chula Vista city government to stream line building permits which are one of the biggest costs to building a home, a fee that a buyer ultimately pays. Government needs to allow old residential and commercial buildings to be re-purposed into more residential housing. This would mean more revenue for the city.
Finally the federal government can assist as well by easing the banking laws and revising condominium defect laws. Dodd-Frank needs to be scaled back for it is too restrictive and is hampering the banks and their attempts to loan money. Vocational training is important to as this nation needs much more skilled labor jobs and the good incomes they provide. July saw an increase in homes sitting on the Chula Vista/San Diego market. I hope my suggestions will help get more buyers into those homes.