James Rainy wrote an excellent story about the culture clash occurring between young and old California liberals over the housing market. My letter to him is below the story link.
https://www.nbcnews.com/news/us-news/california-s-housing-crunch-has-turned-liberals-against-one-another-n851401
https://www.nbcnews.com/news/us-news/california-s-housing-crunch-has-turned-liberals-against-one-another-n851401
Jim, your story about California’s housing crunch turning liberals against one another is one of the most informative and balanced articles about housing that I have ever seen.
I moved to San Diego in 1984, lived there until 2001, when we moved to the North Shore of Oahu. We lived there until 2008 then moved back to San Diego. We've owned and developed real estate in both extraordinarily expensive places. FYI, I’m multi race 59 years old and own a home near Windansea Beach in La Jolla CA.
I moved to San Diego in 1984, lived there until 2001, when we moved to the North Shore of Oahu. We lived there until 2008 then moved back to San Diego. We've owned and developed real estate in both extraordinarily expensive places. FYI, I’m multi race 59 years old and own a home near Windansea Beach in La Jolla CA.
I wanted to share with you one additional market change/distortion, that is also pitting like-minded groups against one another in the same communities and affecting the price and inventory of housing.
VRBO and Airbnb are severely impacting the housing inventory and pricing in coastal California.
Long story short, the number of short term rental units is keeping homes in the hands of owners who in the past would have sold them. Those short term rentals are in highly desirable neighborhoods and are causing higher prices and lower for sale inventory. For example in San Diego, Pacific Beach and Mission Beach are traditionally young people communities. In Mission Beach, it is estimated that 50% of the homes there are short term rentals. San Diego has the nation’s highest percentage of "single family" homes that are being rented. The beach areas are getting very expensive and the demographic of owners who live there full time is rapidly getting older. Short term rentals have diminished inventory and churn of property in San Diego beach communities. Once again, those who owned homes there have experienced a windfall opportunity in holding on to the property because long term rents have skyrocketed along with short term rates and prices have gone up at a much higher percentage in a shorter period of time than inland areas.
Long story short, the number of short term rental units is keeping homes in the hands of owners who in the past would have sold them. Those short term rentals are in highly desirable neighborhoods and are causing higher prices and lower for sale inventory. For example in San Diego, Pacific Beach and Mission Beach are traditionally young people communities. In Mission Beach, it is estimated that 50% of the homes there are short term rentals. San Diego has the nation’s highest percentage of "single family" homes that are being rented. The beach areas are getting very expensive and the demographic of owners who live there full time is rapidly getting older. Short term rentals have diminished inventory and churn of property in San Diego beach communities. Once again, those who owned homes there have experienced a windfall opportunity in holding on to the property because long term rents have skyrocketed along with short term rates and prices have gone up at a much higher percentage in a shorter period of time than inland areas.
So the “haves” want short term rentals that they currently own, the have-nots want short term rentals gone so those units will go back in to the long term rental and owner inventory. The move up beach neighborhoods have gotten so expensive that people can no longer afford them, which then impacts the 1st and 2nd "move up" home buyers because their inventory has shrunk.
I estimate that if short term rentals were eliminated that we could see a 10 - 20% increase in owner occupied and purchased homes in San Diego beach communities. That is enough to really impact pricing and would trigger changes throughout the entire housing supply chain. This is an opinion, but I do have a basis for it.
I would guess the same situations are occurring in LA, San Francisco and other California communities that also have a large number of visitors.
So I would add short term rentals to the stew of controversy that you have identified..
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