A local Look

The San Diego County housing market ended 2011 with a mixed bag: the median home prices dropped from a year ago, down 5.4 percent to $315,000, but sales rose during the year-end rush to close, based on DataQuck’s December report. To check last month’s sales and prices in the county by Zip code:

They dropped 6 percent from $335,000 in Nov. 2010 to $315,000 in Nov. 2011

5/8 economists in the Union tribune believe that their will be an increase.

Alan Gin from the University of San Diego voted yes.  “2011 prediction, $350,000; 2012 prediction,$320,000. The increase will not be significant. Many factors suggest a more significant increase, such as positive job growth and a falling unemployment rate, interest rates at historic lows, and low levels of new housing construction. But there are just too many properties out there in various stages of distress, which will hold the increase to a modest level. Some analysts expect a rebound in fourth quarter of 2012, but I think it will be 2013 at the earliest before there are significant price gains.”

James Hamiltion: UC San Diego voted No. “2011 prediction, $333,000; 2012 prediction $312,000. The biggest price declines are behind us, but I still think it’s very possible that we’ll see further modest decreases before the market picks back up. The unemployment rate will still be very high by historical standers by the end of the year, and renting is still more attractive than buying for many households. Developments in Europe could put more strains on credit markets.

Lynn Reaser from Point Loma Nazarene University voted yes. 2011 prediction, $336,000; 2012 prediction, $325,000. Several forces should drive a modest rise in home prices this year. Job growth has picked up the unemployment rate is slowly subsiding. Mortgage rates should remain near historic lows. Affordability has improved markedly thanks to the drop in both home prices and interest rates. The rise in apartment rents has also made ownership a more attractive option. The overhang of foreclosed homes, particularly in the inland areas, and high standards for loan qualification, will still limit the overall rise to about 3 percent, taking the median price to #325,000 by year-end.

Marney Cox from San Diego Association of Governments voted no. 2011 and 2012 prediction, $300,000. The significant hurdle of clearing the excess inventory of distressed properties is not yet complete. The foreclosure process is expected to speak in 2012 and liquidations, the following year. This additional supply is expected to push the median home price down 5 percent during 2012. The faster foreclosures are processed and returned to the market for sale, the more downward pressure on home prices and a quicker return to a normal housing market. To facilitate this process, regulators are considering a plan to sell fore closed properties to investors who would renovate and rent them’ preventing this correction only delays the inevitable, pushing the construction sector recovery off into the future.

With 2011 behind us its time to turn our eyes to the upcoming year and all the changes it will bring. If there is anything we learned in the last year, its that the shaky and unpredictable housing market has played a large role in the emergence of a focus on rentals both locally and nationally.

Alan Pentico, executive director of the San Diego County Apartment Association, recently spoke with the Union-Tribune here in San Diego about his thoughts on possible trends for the upcoming year.

“Social media will play more of a role in renter-landlord relations…The plan is to increase engagement between both groups.”

With more and more people becoming comfortable connecting via social media channels such as Twitter and Facebook, its no surprise that the upcoming year will see an increase in companies focusing on their online presence to better communicate with customers.

“More first-time landlords are entering the market. Given falling home prices, consumers are snapping up properties as investments…”

While at first the idea of taking on the role of property manager seems like a smart one given the consistently low price of housing in San Diego over the last few years, it can be a trying task for the under prepared.

Some of our recent Landlord Lesson’s posts are designed to address this very issue. There are a multitude of laws, regulations, and city-specific rules that must be closely followed in order to avoid a lawsuit or court-room fiasco. Not consulting a professional property management firm or a specialist in real estate law could wind up being a costly mistake.

While we don’t know what the future holds, you can be sure that we’re as prepared as we can be. If you are considering renting out one of your properties or even just looking into investing, Rancho Mesa is your go-to source for the latest information and insight. Here’s to a great year!

Image: NASA

County employment has grown by 2.2% so far this year – second-highest rate in state

San Diego County’s jobless rate dropped to its lowest point since the spring of 2009, as the region continued to have one of the state’s highest growth rates. The jobless rate fell from 9.7 percent in October to 9.2 percent in November, according to data released by the state Employment Development Department on Friday. The county added 8,000 jobs in November, although most of that came from seasonal hiring in stores and shopping malls. After weeding out those seasonal fluctuations, the county added a net total of 1,600 jobs. And if the jobless rate were similarly adjusted to reflect the seasons, it would probably be 9.4 percent, said Lynn Reaser, economist at Point Loma Nazarene University.

But even with the adjustment, that rate is the lowest in more than two years. And Reaser noted that drop in the jobless rate occurred even though more workers are re0entering the job market. “On balance, San Diego’s job market is far from robust but it is posting gradual improvement,” she said. Besides retail, which added 4,800 jobs, the greatest growth came from health care, which added 3,100. But those gains were offset by declines in other areas, especially construction, which lost 1,000 jobs. On a year-to-year basis, San Diego County has added 26,600 jobs, with 2.2 percent growth rate. In California, only Silicon Valley has a higher growth rate – 3.3 percent.

California also cut its unemployment rate last month, from 11.7 percent in October to 11.3 percent in November. But its growth rate for job creation is slower than San Diego’s at 1.7 percent. “The California story is still a tale of two economies: by geography and by industry,” said Steve Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto. “Job growth remains centered in the urban coastal regions and in the technology, trade and tourism sectors.” Levy said the reason that jobs are growing in San Jose, San Diego and San Francisco is that “these areas are seeing a flurry of startups, IPOs coming to market, expanding exports and a rising level of optimism about the future.”  On the other hand, Levy said that November did see the beginnings of a job recovery in other areas that had been lagging, including the Sacramento region, the eastern half of the Bay Area as well as the Inland Empire. “Across the board, in every region, the unemployment rate came down,” noted a report from Beacon Economics in Los Angeles. “Moreover, the drop has occurred despite labor force increases.

This means that unemployment rate is genuinely improving as a result of real improvements in the economy – something that bodes well for future conditions.” After seasonal adjustments, based on preliminary calculations from company payrolls, the state added only 6,600 jobs in November – much smaller than in recent months. But Beacon notes that the preliminary payroll data has been continually revised upward after more numbers come in from the field. The number for October, for instance, was just revised upward by 11,900 to 37,000 jobs. And 27,400 jobs were added to the September figures, creating a total gain of 83,400 jobs over the past three months. In light of the recent string of upward revisions – which often occur as the economy is turning a corner – Beacon suggested that the weak November figure may be nothing more than “a statistical anomaly that will be corrected next month.” A household survey of families suggested a gain of more than 100,000 workers in November. Although that survey is considered less reliable than the payroll survey, it does include self-employed workers, ranging from household maids to business consultants, who rare not included on payrolls.

“The important thing is that we continue to gain, and are up 211,400 jobs since January of this year,” said Michael Bernick, a former head of the Employment Development Department who is currently an employment specialist affiliated with the Milken Institute in Santa Monica. The state’s 1. Percent growth rate would be very strong in a healthy economy. But in an economy that is crawling out of a recession, economists say a growth rate of 3 percent to 5 percent is needed in order to make a sizable dent in the jobless rate. “November’s good news is tempered by the realization that there are still 1 million jobs to recover in California from before the recession and that process of recovery is under way but still much slower than hoped for or needed,” Levy said. “And political gridlock in the state and nation together with economic turmoil and a likely recession in Europe provide headwinds for the state’s now expanding economy.”

Dean Calbreath U-T

The holiday season is upon us! Here at Rancho Mesa we love to celebrate the hard work we’ve done all year by spending some quality time with friends and family while enjoying a warm fire, hot cocoa, and perhaps even some eggnog. But along with the holiday cheer that the end of the year brings, there is often a bit of irresponsible behavior that could lead to some serious safety hazards for property managers and their tenants. So while you’re watching those chestnuts roast over the open fire, keep these tips in mind for a safe and happy holiday!

These Homeowners Surely Checked Their Sockets Before Flipping The Switch!

Christmas Trees
Who doesn’t love a beautifully lit, natural Christmas tree?We sure do,  but almost 400 fires originating with the tree are reported every year by the U.S. Fire Administration, so be smart and take some precautions to avoid a holiday hazard!

• Try and choose a fresh tree to avoid the highly flammable dry needles that will collect around it.

• Make sure you water the tree constantly as they tend to lose a great deal of water every day once they’ve been cut.

Holiday Lights
Along with the tree, decorating around the house with an array of festive lights and ornaments helps get everyone in the holiday spirit. However, improper use of extension cords or a short circuiting string of lights could easily lit the house up in all the wrong ways!

• Make sure you’re not overloading your circuits/outlets by trying to run too many lights from one source.

• Never fold or staple extension or power cords (even if they totally ruin the holiday manger display!)

• Always double check old lights and extension cords for frayed or damaged wiring

Smoke Alarms
Well, this is probably a no-brainer, but hey we’re here to prevent these safety issues and you can never have too many friendly reminders. The vast majority of deaths resulting from structural fires are in homes with faulty smoke alarms. A quick check around the house to make sure all batteries and alarms are functioning properly could mean the difference between chestnuts roasting on the open fire and everything you own roasting on the open fire!

Image: Bostonist

In this day and age it’s important for both tenants and property managers, especially those in charge of multiple homes or buildings, to be conscious of their carbon footprint. Here at Rancho Mesa, we truly believe it is not very difficult to propose green incentives to your tenants, as many people are willing to invest the little bit of extra energy and meet you half-way. Ultimately, not only can you save yourself some extra cash, your residents will be thankful for knowing you’re invested in the well-being of their home and hopefully treat it as their own. Here are 5 easy suggestions for going green this season!

Energy Efficient Electronics
LED (light emitting diodes) bulbs have been making a big splash in the last few years. While they tend to cost a bit more than your average bulb, their overall life expectancy is significantly longer (up to 10 years!) and are considerably more energy efficient. Consider opting for LED bulbs in harder to reach areas where bulbs won’t need replacing as often if the costs are too great to equip the entire property.

Community Gardens & Easily Maintainable Plants
If space allows, consider designating an area for a small garden that residents can use to cultivate their own personal produce or vegetables. Not only can this improve the overall look of the property by adding some character, its another great way  to get tenants invested in the property and inspire them to maintain it. The goal is that hopefully this motivation will also transfer to other areas of the home.

Opt for Green Cleaning Products
Along with the growing desire among the greater population for smarter, more efficient products has come a booming “green cleaning” industry. Many large manufacturers are emerging with their own green versions of cleaning products from spray’s to laundry detergent.  Seventh Generation is the most prominent brand of green cleaning products and offers a large variety of options for just about any household cleaning need you may have. Your tenants will surely appreciate the fact that you are going the extra mile if you make a point to inform them as well.

Set Up An Useful, Efficient Recycling System
While many homes in California come equipped with a recycling bin for the weekly trash pick up, it’s astonishing how many multi-unit complexes lack an organized recycling system. Space permitting, consider putting individual recycling bins next to the catch-all dumpster where trash is usually disposed of. It may mean you have to take an extra trip to a designated facility once a week, however, if you make the effort to do so it will continually reinforce your commitment to providing the best possible living situation for your residents in addition to being an overall benefit to the environment.

Go Paperless
In this day and age, it’s getting easier and easier to set up an easy system for online billing. Whether through a direct transfer service like PayPal or another private service this great suggestion from Green Property Management can save time and headaches by streamlining the process of receiving payment for bills and monthly rent. It’s safe, secure, and allows you to easily manage your funds while saving a few redwoods in the process.

Going “green” isn’t going to happen overnight, and you shouldn’t feel like you need to rush out and revamp your entire property to be more eco-friendly right away. With these tips you can see how easy it is to make small changes over time that will strengthen your relationship with tenants as well as improve the environment around you, and that’s the goal we’re all trying to reach!

Image: Newvistawallpaper

California ranked sixth in the nation in negative equity, widely known as being “underwater” on a mortgage, based on the latest data from real estate tracker CoreLogic this week. The third quarter was the first time the state has not been in the top 5 since 2009, when the company started to track negative equity, a state in which a homeowner owes more on their mortgage than their home is worth. Nevada leads with 58 percent of its homes being “upside-down.” Arizona (47 percent), Florida (44 percent), Michigan (35 percent) and Georgia (30 percent) follow, CoreLogic reported. The third quarter was the first time Georgia entered the top five. California’s share of underwater homes with mortgages was almost 29.7 percent; the data show the state has more than 6.8 million mortgages, with more than 2 million of them in negative equity.

CoreLogic estimates more than 300,00 mortgages in California are “near negative equity,” which the firm defines as “properties in negative equity or within 5 percent of being in negative equity position.” On a national level, 22.1 percent of homes with a mortgage were underwater at the finish of the third quarter, down from 22.5 percent in the previous quarter, based on this week’s analysis. What does this mean? CoreLogic’s chief economist Mark Fleming said in a statement: “although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness. The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”

Lily Leung – U-T