What is Proposition 10?  Proposition 10 is a statewide ballot initiative in the November 2018 election that aims to repeal the Costa-Hawkins Housing Act.  Why does that matter to you?  If the Costa-Hawkins Housing Act is repealed here are some possible issues.  Don’t get me wrong it is an undeniable fact that the cost of housing in major California metropolitan areas has grown far out of reach for many residents. The housing-cost burden has become the Achilles’ heel of California’s economic future. Proponents of rent control generally believe that price protections are the most effective ways to help tenants avoid displacement, which disproportionately affects seniors, lower-income tenants, and renters of color. Nevertheless, California’s affordability crisis is a direct result of an undersupply of housing built over the last decade. 

According to a recent Department of Housing and Community Development (HCD) report, “California’s Housing Future: Challenges and Opportunities,” housing production has averaged less than 80,000 new homes annually over the last 10 years, and ongoing production continues to fall far below the projected need of 180,000 additional homes annually. With now an almost 2 million housing-unit deficit, there is a need for an additional 1.8 million units to be built by 2025 to meet the state’s projected population and household growth.

If these units are not built, housing will become even less affordable. 

Nevertheless, as research on the impact of rent control across the state and the country has shown, expanding rent control will further exacerbate affordability by adding an additional disincentive to constructing new units and supply of rental units in the market. Specifically, research cited in a recent analysis from University of California, Berkeley shows that rent control reduces the supply of rental housing in the following ways:

• Rent control incentivizes property owners to sell or convert them to nonresidential units.
• Rent control reduces the efficient allocation of housing by disincentivizing current tenants to move even when they don’t need all the space or their financial means have improved beyond the need for rent-controlled housing.
• And critically important now, rent control discourages new development of rental supply by removing developers’ certainty that they will be able to repay their loans and their investors, significantly impacting the feasibility of many construction projects.

Its a tough dilemma to be in, rent is high and those high costs effect the lives of everyone who needs a place to live.  But repealing the Costa Hawkings act is not the answer.  Repealing this act will stifle new home production and make a state that struggles with an already low number of houses for its residents even more challenged.   

Some great news coming out of the California job growth sector this month.  Employers have created 44,800 positions in California in the month of August.  This added to a stellar year of job growth in 2018 totaling 348,900 jobs with 4 months to go!  What does that mean to us locally?  Since July 2,500 jobs have been added in Sonoma County and 1,000 jobs were added in Marin.  With the job market and the checks coming each week/month from those jobs directly tying into the housing market I’d say we are still trending in the right direction.  Does this mean that the housing market will continue to climb?   No one can say for sure but it certainly is a good sign that the bottom will not fall out anytime soon. 

For the 5th strait month listings in California have also increased.  In fact this Aug there were 17.2% more listings then had on the market last August.  Although pricing has began to slow down on these listings the number of listings themselves continues to rise.  What we have seen in the local Petaluma Real Estate Market is a upwards trend in price reductions the last month.  Listings that would have had multiple offers 4 months ago now are starting to sit 3 weeks.  Value’s are not dropping but the days of 10+ offers on every home are starting to disappear.  Great news for the local Petaluma home buyer. 

Mike Ward

Petaluma Realtor        

Lets take a look at a snapshot of the market for the week of 8/6-8/12.  We saw a small overall decrease in homes on market this week.  There were a total of 85 active listings down from 100 a couple weeks ago.  On the Westside this week there are 56 units on the market with a median sales price of $975,000.  There were 5 new listings with a median price of $1,049,000.  6 units went into contract averaging $762,000 and 5 sold averaging 650K.

On the Eastside we have 29 units averaging $768,000.  3 new units came on averaging 695K, one went in contract at 595K, and 4 sold at 725K. 

A lot still happening and moving fast although we are seeing some homes stay on a bit longer at 900K and above.  Petaluma Real Estate remains hot and I don’t see that changing anytime soon. 

Mike Ward-Petaluma Realtor  

TESTING TESTING TESTING

The Bay Area Q2 results are in and the North Bay snagged two of the the top ten fastest appreciating markets.  Novato took the #8 spot with an increase of 18.9%.  For the first time in three years Novato climbed to the 1.1 million dollar median mark.  At the #6 spot you will find the city of Sonoma which rose 30.5% in Q2 to a median price of $895,999. 

On the home front in Petaluma Real Estate we are starting to see a small increase of Day on Market.  Anything under 700K is still flying but it seems that homes above 850K are taking a bit more time to go into contract.  It is too early to tell if this is a trend or if a bunch of home buyers are vacationing, but it has been a breath of fresh air for buyers writing their tenth offer on their tenth home! 

Mike Ward-Petaluma Realtor