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An increase in homebuilding could be on the way

Posted at 5:20 PM, Sep 08, 2021
and last updated 2021-09-08 20:28:12-04

SAN DIEGO (KGTV) -- San Diego County developers are on pace to pull upwards of 10,000 building permits for new homes this year, which a new report says would be the most in more than a decade.

The report, from the Southern California Real Estate Research Council, says in the first half of 2021 developers obtained permits for 4,973 housing units, about two-thirds of them attached homes. If that pace ticks up a tad, the industry could get the green light to build more than 10,000 new homes in a year for the first time since 2006, the year before the housing crash that led to the Great Recession.

"The way our structure is now, it really only encourages our ability to build at the higher income, and we've got to figure out how to scale it back," said Lori Pfeiler, CEO of the San Diego Building Industry Association.

Pfeiler said her personal challenge is to get home prices down to $400,000 to $600,000, a range that middle-income earners can more easily afford. Currently, the median price for a home in the county is $730,000, according to CoreLogic.

Pfeiler said she believes developers are pulling more permits because City Councils have become more pro-housing. However, she noted remaining challenges with the approval process and scarcity of land.

Even if the region hits 10,000 permits in 2021, SANDAG says it needs upwards of double that annually through 2029 to meet demand.

Gary London, principal with London Moeder Advisors, said most of the big projects are occurring in Mission Valley and downtown. He said he expects housing prices to eventually stabilize, once mortgage rates go back up. That, however, would present its own set of challenges to affordability.