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San Diego Re-Imagines Its Future

San Diego is a preeminent city known for parks, museums, world-class beaches, and a funky downtown that appeals to artists, naval officers and the health conscious. It has seen an impressive emergence in biotechnology and healthcare marketplaces recently. San Diego’s real estate landscape is eclectic, a diverse mixture of stunning beachfront condos, striking homes built into cliffs, and funky downtown lofts. Part of the appeal of living in San Diego is the easy access to local beaches and regional parks – land which covers 6,200 acres.

But San Diego’s recent demand and popularity has created some challenging issues for the local government. The demand for homes in San Diego has outpaced supply – inevitably causing an increase in home prices and housing shortages.

Last year, a report issued by The San Diego Housing Commission noted the city needed to build upwards of three-times as many homes to stabilize prices and to keep pace with demand. The construction industry has heard the call and responded accordingly. Additionally, the City of San Diego launched a revised master-plan for the city’s parks.

Help from the Government?

In 2018, Government Sponsors Entities (GSE) like Fannie Mae and Freddie Mac raised conforming loan limits. Conforming loans limits are now $453,100 with higher limits set for multi-unit dwellings. It is expected that FHA’s and the VA’s Loan Limits will follow.

However, if a subject property falls within the government’s defined high-cost areas (of which San Diego is one), those borrowers have access to high balance loan limits. The high balance loan limit for a one-unit property in San Diego County is $679,650. HUD issues these limits from an analysis of median homes in each county. The maximum limits for 2018 are:

(Source: Fannie May Lender Letter 10/2017)

By creating separate loan limits for homes in high cost areas, the GSE’s have reduced mortgage carrying costs. High cost loan limits (43% higher than non-high cost areas) have essentially given homeowners an opportunity to either a) afford a higher mortgage or b) reduce their housing costs.

With some finesse, an experienced innovative loan officer, and some unexpected help from the government, you might just be able to find a way to live in the eighth largest city in the USA. America’s Finest City’s future looks as bright as a day playing on La Jolla’s sandy beaches, watching a dazzling sunset.

San Diego Union Tribune, Sept 21, 2017, Phillip Molnar, https://www.sandiegouniontribune.com/business/real-estate/sd-fi-housing-plan-20170921-story.html