How bad is housing affordability?  The California Association of REALTORS® (C.A.R.) recently reported that home affordability statewide has dropped to its lowest level in a decade, and it’s worse in San Diego County.  The 10-year low in purchasing power was blamed on tight housing inventory that has pushed home prices higher. 
In the third quarter of this year, C.A.R. said only 28 percent of California households could afford the state's $555,680 median-priced home, compared to 29 percent in the second quarter and 31 percent in the third quarter a year ago.  In San Diego County, only 26 percent of households could afford to purchase a median-priced home, which remained unchanged from 2016. 
C.A.R. said it was the 18th consecutive quarter for its statewide Housing Affordability Index (HAI) index to be below 40 percent, and the lowest since the third quarter of 2015.  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 home buyers in the state. 
To afford the statewide median-priced single family home of $555,680, a household would need to earn $112,100 annually to make the necessary $2,800 monthly payments, according to C.A.R. The payment includes principal, interest, and taxes on a 30-year, fixed-rate mortgage with a 20 percent down payment and an effective composite interest rate of 4.16 percent.  The effective interest rate in the second quarter 2017 was 4.09 percent and 3.76 percent in the third quarter of 2016. 
The C.A.R. report also said that the affordability of condominiums and townhomes also dipped slightly from 39 percent during the second quarter of 2017 to 38 percent during the third quarter of 2017.  To qualify for the purchase of a $440,000 median-priced condominium or townhome, a California resident would need to earn $88,770 to make monthly payments of $2,200. 
Meanwhile, in other recent real estate news, while affordability has been a long problem in San Diego and the rest of California, Zillow reports the rate of homeownership is still increasing. “ Housing costs are rising, competition among buyers is fierce and the number of homes actually available to buy is at historic lows, and still, the U.S. homeownership rate is on the rise, climbing for the second straight quarter to its highest level since 2014 and proving American home buyers are nothing if not tenacious and resourceful,” said Dr. Svenja Gudell, Zillow’s chief economist. 
Also on the bright side, the San Diego real estate market was the fourth “hottest” in the country in October, based on views of online sales listings.  The website Realtor.com, the consumer website of the National Association of REALTORS®, reports a typical San Diego property was on the market for just 40 days in October, compared to the national median of 73 days.  The only markets hotter than San Diego were also in California, including San Jose-Silicon Valley, Vallejo-Fairfield and San Francisco-Oakland. 
Regarding home prices, San Diego had the third highest annual home price increase in the nation in August, a distinction not reached since 2014, according to a leading real estate index.  San Diego County’s home prices have risen 7.8 percent from August of last year and .09 percent between July and August said Standard & Poor’s CoreLogic Case-Shiller Indices.  Only Seattle and Las Vegas had bigger increases in the 20-city index. 
In the last two years, the San Diego region has averaged around 10th place in the S&P index, making August’s jump noteworthy.  San Diego’s yearly increases outpaced the nationwide gain of 6.1 percent and the rest of California.  Seattle had the biggest yearly increase at 13.2 percent, followed by Las Vegas at 8.6 percent.  Los Angeles and San Francisco had 6.1 percent increases.  The lowest increases were in Chicago at 3.7 percent and Washington, D.C., at 3.4 percent. 
The indices were created by taking the price of homes in those cities in January 2000, assigning them a value of 100, and tracking their subsequent rise and fall.  In August, San Diego’s mark was at 245.55, representing a home value increase of nearly two and a half times over nearly 18 years.  Prices have risen at a greater rate only in Los Angeles. 
Trending nationally, unemployment is continuing to fall, despite the impact in September of Hurricanes Harvey and Irma on depressed payrolls in Texas and Florida.  The nation’s jobless rate fell a notch further in October to a 17-year low of 4.1 percent.  The unemployment figure has fallen sharply this year from 4.8 percent in January, suggesting the long-term expansion in the labor market remains solid under the Trump administration.  Taking the last three months together, employers added on average 162,000 jobs a month.  That is down slightly from last year and the first half of this year, but still well above what’s needed to absorb the natural increase in the workforce population, the government said. 

I’m pleased to announce two new NAR resources, which launched at the REALTORS® Conference & Expo last week: an updated Fair Housing Act Video, and a new way to hear Real Estate Today.  Below are Fact Sheets for each, accessible by clicking the green icons. 

Housing Point: Fair Housing Act Video-Download

As part of NAR’s commemoration of the 50th anniversary of the Fair Housing Act, NAR has created the Housing Point: Fair Housing Act Video-Download to educate real estate professionals on how to comply with the FHA. 

The video includes vignettes that real estate professionals may encounter. 

Real Estate Today Now Available on the Amazon Echo

The Real Estate Today radio show is broadcast on 200 stations across America.  NAR has now made it easier for millions of consumers worldwide to listen to the show by enabling The Alexa Skill for Real Estate Today. 

Access the proactive, professional and Pro- REALTOR® content of the show without the need for a radio, computer, or smartphone. 

C.A.R. and NAR are STRONGLY OPPOSING the Congressional Tax Cut and Jobs Act that was released this week.  C.A.R. opposes the proposal because it dramatically weakens the tax code incentives for homeownership. 

ACTION ITEM

Ask your Member of Congress to oppose this and any tax reform proposal that dramatically weakens the incentive for homeownership. 

Enter Your PIN: 182028921or the PIN number FOUND HERE followed by the # sign to be connected to your Member of Congress's office. 

Call from 6:00 AM to 2:00 PM Pacific Time Weekdays
When staff answers the phone, you can use the following script:"Hi, this is (insert your name).  I'm a constituent and a REALTOR®.  Please ask my Representative to OPPOSE this and ANY tax reform proposal that WEAKENS THE INCENTIVE TO OWN HOMES." 
C.A.R. OPPOSES the Tax Cut and Jobs Act Because:We must reverse the decline in California’s homeownership rate.  For over 100 years Congress has incentivized homeownership with the tax code; currently through the mortgage interest deduction.  Any effort at reforming the tax code should maintain and prioritize this incentive.  The current proposal only pays lip service to incentivizing homeownership.  The proposed changes will result in only top earners itemizing their deductions.  Therefore, the vast majority of people will no longer receive any tax incentive to purchase a home.  So, while the proposal keeps the mortgage interest deduction, the incentive effect of the deduction for Americans to become homeowners disappears. 
It weakens the mortgage interest deduction. 

It caps the mortgage interest deduction to the interest on a mortgage principle of $500,000. 

Homeowners would no longer be able to deduct the interest they pay on home equity loans. 

The deductibility would be eliminated for second homes and limited to loans on a family’s primary residence. 

Families build wealth through homeownership.  According to a report by the Federal Reserve in 2016, homeowners amassed wealth at a greater rate than renters.  Renters had a median net worth of $5,200 while homeowners had a net worth of $231,400. 
For More Information
Contact Rian Barrett at rianb@car.org. 

NSDCAR always has your back and this holiday season is no different.  We are running our annual See's candy promotion with great discounts on tons of different candy assortments.  No need to wait in lines or worry if you'll get a box for your loved ones this holiday season. 

To check out what's available, please visit:

Here is the latest in a series of occasional articles on “Best Practices” for NSDCAR members from 2017 NSDCAR President Michael Carunchio. 
By Michael Carunchio
Open houses can sell homes.  Successful REALTORS® know this.  It doesn’t matter how attractive the listing if people don’t know about it.  Plus, it makes sense to expose your home to the largest possible maximum number of buyers and then attract buyers inside that home for a preview.  The more people who look at your property, the better chance you have to sell it at top dollar.  You never know who will fall in love with your listing.  Here are a few ideas that may help our Association members. 
-- Make a good impression with a clean-up.  A fresh coat of paint and a few new items, such as mailbox or house numbers, can do wonders.  You also might want to enhance curb appeal and freshen up the landscaping, trim the lawns, clean the driveway and sidewalks, as well as have the windows washed and carpets cleaned. 
-- Get rid of clutter, including knickknacks and personal items, such as an animal head on the wall or a photo of the owner with a politician.  Also, make sure valuables are secured.  Lock up anything that might tempt sticky fingers, such as jewelry, personal electronics, and valuable trinkets.  Your goal is for buyers to walk inside and visualize it as theirs.  So, temporarily relocate family photos and ditch the children’s crayon drawings on the refrigerator.  Also, open up the curtains and blinds and turn on lights in every room to set the mood as cheerful and sunny. 
-- Remove pets if possible.  Dogs, cats and litter boxes should be neither seen, heard or smelled during an open house.  If removal is not possible, then keep them confined in a less-trafficked location.  For sure, current owners also need to be out of the way. 
-- Put up signs not only in the front lawn but at nearby intersections that direct visitors to the house.  A string of balloons also draws attention.  Help people find you.  Be sure to follow local sign ordinances.  Some municipalities have strict sign ordinances. 
-- Use social media, including Facebook, Twitter and Instagram.  A National Association of REALTORS® (NAR) study found 92 percent of homebuyers use the Internet in their search.  And, many house hunters today are using apps to help them find open houses within a certain radius with maps and directions to each one.  Realtor.com has a free real estate app for consumers.  You never know who outside your circle of friends might stumble across your tweet or Facebook post.  So, do some investigating and get your listing included. 
-- Ask questions and seek feedback.  Guests will be glad to tell you their opinion about certain home features, which you can use as selling points.  Also, ask how they found out about your open house.  Providing light refreshments will encourage guests to linger and engage in conversation. 
-- Have a leave-behind that guests can take with them.  Some REALTORS® will prepare a brochure or flyer with your name and photos of the property, while others will provide information on comparable home sales or school and community factoids.  Don’t allow potential buyers to leave empty handed.  If you prefer online information, then get an e-mail address or phone number for texting. 
-- Invite the neighborhood to attend.  Even if they’re not looking to move, nosy neighbors might have friends or relatives who are considering a move.  Consider the neighbors as your prospecting scouts.  Plus, meeting new people could help you find new clients.