The San Diego Union-Tribune reports that the dwindling housing unit inventory is causing the drastic increase in home prices in the area. The high prices are pushing more and more residents out of their houses and leaving others incapable of affording homes.
In the last five years, home construction in San Diego only reached 6,400 units. To bring the prices down and keep them low, construction companies will have to triple the number of properties built each year. This is to keep up with the current housing demand in the area, San Diego Housing Commission reports.
San Diego is in need of around 150,000 to 220,000 additional housing units which must be built in the next 11 years. This includes single-family or multi-family homes, condominiums, and rental apartments.
Earlier Reports Reveal San Diego Housing Crisis has Worsened
According to a report earlier this year, the explicit shortage of new homes in San Diego has caused the housing crisis to get even worse. The scarcity of housing units has greatly contributed to the very high home prices in the area.
In the same report, it was said that in the next three years 162,000 new units are needed to meet the demands. However, only 80,000 housing units are expected to be constructed by then.
If this continues, many experts fear that there will a massive loss of residents in the San Diego area because of this. The people that will be affected the most will be the seniors and young adults, driving them out of the county.
Addressing the Pressing Issue
San Diego has begun tackling the housing crisis it is presently facing. In July of 2017, a legislation was approved aiming to address the pressing issue quickly by increasing the number of homes constructed while keeping the prices low enough so that low- to middle-income workers can afford them.
According to the San Diego Union-Tribune, dozens of initiatives are up on the board which Mayor Kevin Faulconer and other city leaders are planning to enact in the next few years to boost the current housing situation.
One of the new laws was to make it easier and cheaper for homeowners who have enough space in their properties to add auxiliary housing known as “granny flats”. These units will then be rented to eligible homeless people in the area.
Home Construction Loan Can Help
At this point, it may be useful to know other alternatives to owning a home. While there are home mortgage loans used to purchase already-existing dwellings, there are also loans that can be used to construct houses from scratch.
One type of construction loan is the “Construction-to-Permanent” loan. This loan allows you to wrap up two different loans, construction and purchasing a new home. Instead of getting two separate financing for each which will also require separate closing costs and other fees, you get one. This means that you can potentially save money on this certain type of loan.
A conventional mortgage loan cannot be used to buy a lot or a semi-built property. Some people may take a separate financing to cover the costs for this, then take another loan once the construction is complete.
In a construction-to-permanent loan, the lender disburses the funds to the builder to go on with the construction phase. A part of the loan processes can also be used to purchase the land on where the home will be built.
During the construction phase, the borrower has the option to start paying the loan by making “interest-only” payments. During this phase, the interest may be adjustable. Once the construction is completed, you may opt to switch to a fixed interest rate. At this point, the loan rolls into a standard mortgage.
To look for lenders who offer construction-to-permanent loans, you may start your search online. Mortgage.Info can help you get connected with the market’s finest who also provide reasonable loan interests.
You may begin shopping for lenders here, free of obligation. Get first-hand information about this loan and many other home financing options.