Nearly 50,000 locals still underwater

Homes are lined up near Carmel Valley.
Homes are lined up near Carmel Valley. — K.C. Alfred

By Jonathan Horn

Tens of thousands of San Diego County homeowners continue to owe more on their properties than they are worth, despite the run-up in prices that has taken place over the last two years.

In the second quarter of this year, there were 46,585 county homeowners underwater on their homes, real-estate tracker Zillow reported this week. Those with negative equity make up about 10 percent of property owners in the county who have a mortgage, down from 21 percent in the second quarter of last year.

The homeowners were underwater despite an increase in the county’s median home price of more than $100,000 over the last two years.

“There were a lot of people that got caught at the top (of the housing bubble),” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “During the run-up, people were just out at a frenetic frenzy in 2006 and 2007. They didn’t care what price they paid for property.”

Negative equity in the county peaked at 35.6 percent of homeowners in the first quarter of 2012, but it appears those remaining underwater bought in areas with new construction completed just before the housing crash. Most of the negative equity in the county is in Chula Vista, Oceanside, San Marcos, Spring Valley and El Cajon.

As a whole, San Diegans who are underwater collectively owe $6.14 billion. That amount, however, should continue to decrease as San Diego home values rise, and people regain equity in their properties.

For example, in June, the median sale price in the county was $450,000, up 8 percent from June 2013, and 34 percent from the median in June 2012. Still, that’s a long way from the peak median of $517,500 in November 2005, according to CoreLogic DataQuick.

Zillow predicted that by the second quarter of next year, the percentage of homeowners underwater will decline to 7.6 percent in San Diego County.

“We knew it was going to take a long time to correct,” Goldman said. “There’s always going to be properties that are upside down. Is this more than normal? Yes, but we’re returning to a more stable market, and there will be people who just simply have paid too much for their property.”

Christopher Thornberg, founder of Beacon Economics of Los Angeles, said the move-up market will get a drastically needed boost as people regain equity in their homes.

“More of that equity means that people are going to have better access to capital, they’re going to have more money to put down on other properties,” he said. “The move-up buyer is the kind of buyer that drives new home construction.”

Nationwide, 17 percent of homeowners, or 8.7 million, were underwater in this year’s second quarter. Of the nation’s 35 largest metropolitan areas, San Jose had the lowest percentage of property owners underwater on their homes, with 4.6 percent, while Atlanta had the highest at 28.9 percent.


BALBOA PARK GOLF COURSE PLAN GETS GO-AHEAD City attorney’s office deems funding method sound

Architect's rendering of clubhouse expansion

  • Architect’s rendering of clubhouse expansion

The City of San Diego, golfers who frequent the Balboa Park Golf Course, and pedestrians who traipse and cycle the the winding road where the clubhouse is located hope to replace the 1930s clubhouse, pathways, and the adjacent dirt parking lot. They hope to do so by using cash from the Golf Enterprise Fund, an extra fee tacked on to the green fees golfers pay to play the 18-hole city-owned golf course. Good news for them: the city attorney’s office has changed their opinion and is now allowing the city to use those funds on non-golf-related portions of the project.

The change of heart comes amid questions over whether or not tapping into the “Golf Enterprise Fund” violated Proposition 26, the state law requiring any tax or fee’s approval by two-thirds of the electorate unless the revenues of said fee are used specifically to benefit those who pay the fee. Because the renovations include a bicycle and pedestrian path, updated wedding facilities, a new bar and restaurant — amenities that will be used by the general public and not solely golfers — using those revenues were at first thought to be contrary to the law.

Of course, the city has been stung by that provision before, most recently in the case of the Greater Golden Hill Maintenance Assessment District. In that case, the city was forced to dissolve the maintenance-assessment district for (among other issues) failing to address the specific benefits for residents who paid the assessment and the improvements benefiting the general public. The city continues to defend several lawsuits over special assessments.

Oddly enough, the same community that won the lawsuit wishes to use the golf revenues on the non-golf-related items.

In February of this year, the Greater Golden Hill Planning Group voted to deny the clubhouse expansion solely because, at the time, pedestrian improvements were not included in the plans. In fact, before the vote, city staffers were under the impression that the Golf Enterprise Fund could not be used for any pedestrian improvements.

This from a February 15 article by the Reader’s Ian Anderson:

[Project manager Todd] Schmit indicated the Golf Enterprise Fund, which would be paying for the new development, would or could not be used for improvements to Golf Course Drive, which also cannot be funded by the city’s Street Division because it is considered a park road.

While private developers would be required to provide pedestrian-access considerations, work on the public golf course seems to exist in a bureaucratic gray area, where the project does not seem to be accountable for maintenance or improvements to its access road.

Since siding with the residents, the city attorney’s office has given the council and city staff the green light to move forward with the plan.

“The use of Golf Enterprise Funds to construct special event facilities at the proposed Balboa Park Golf Course Clubhouse is a permissible use of those funds if the special event facilities are for the operation, maintenance and development of the golf course,” reads a May 27 memorandum from the city attorney’s office.

“Similarly, the use of Golf Enterprise Funds for pedestrian and bicycle improvements to Golf Course Drive as part of the proposed Balboa Park Golf Course Clubhouse Project is a permissible use of these funds if these pedestrian and bicycle improvements are for the operation, maintenance and development of the golf course.

“The use of the Golf Enterprise Funds for these purposes is likely exempt from Proposition 26 under the ‘specific benefits or privileges’ exemption or the ‘use of property’ exemption, or both, although the ‘specific benefits or privileges’ exemption requires that a determination be made that these improvements provide a specific benefit to the payors, and that the fees charged do not exceed the reasonable cost to the government of providing that benefit or privilege.”

The city council is expected to weigh in on the expansion project during an upcoming hearing.

San Diego home appreciation leads U.S.

Homes are lined up near Carmel Valley.


San Diego County’s housing market led the nation in price appreciation in February, as the region moved out of its annual holiday homebuying lull.

The S&P/Case-Shiller Home Price Index showed Tuesday that from January to February, prices on the index rose 1 percent, highest on the 20-city measure. Prices declined over the month in 13 of the cities included on the closely-watched index.

“There’s a fundamental housing shortage in San Diego County, it’s that simple,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “We have a strong housing market in San Diego as a result of a shortage. We have demand and a robust economy compared to a lot of other communities.”

The index, which lags two months, measures repeat sales of single-family homes. From February 2013 to February 2014, San Diego home values are up 19.9 percent, trailing only San Francisco and Las Vegas in annual appreciation.

Still, Goldman said he sees the local market continuing to slow, perhaps down to its historical 3 to 3.5 percent annual appreciation level.

The slowing seems to have started. For instance, the index rose from 163.28 in January 2013 to 194.07 in October, hovering around that total the rest of the year. In February 2014, it reached 196.97, highest since it was 197.45 in January 2008, but on the decline in the Great Recession.

Goldman said now that values of recovered, the market is adjusting to a new normal.

“We’re starting to see shifts in different consumption habits of homebuyer,” he said. “We’re seeing a lower desire to jump into the housing market, we’re seeing slower household formation, people are living at home longer, people are pooling resources instead of running out and jumping into that house. People are much more careful about their home-buying decision.”

David Blitzer, chairman of the index committee at S&P Dow Jones, also said despite price gains in much of the country, the market is slowing. That’s exemplified by fewer sales, housing starts, and the fact that home prices haven’t made it back to their 2005 levels. Blitzer also notes that mortgage rates have remained steady since they jumped last May, hitting affordability amid concerns over consumer confidence and tighter qualification standards.

“Five years into the recovery from the recession, the economy will need to look to gains in consumer spending and business investment more than housing,” Blitzer said in a statement. “Long overdue activity in residential construction would be welcome, but is certainly not assured.”

The average rate for 30-year-fixed mortgage in February was 4.3 percent, up from 3.53 percent in February 2013, Freddie Mac reports.

DataQuick, another real estate tracker, reported in February that San Diego County’s median home sale price was $410,000. It rose to $427,000 in March.

Las Vegas had the highest year-over-year gain on the index, at 23.1 percent, while San Francisco was second with 22.7 percent appreciation. Both were about flat from January to February. In Cleveland, where prices declined 1.6 percent from January to February, annual appreciation was 3 percent, slowest on the 20-city index. 


San Diego County Water Authority Turf Replacement Program

San Diego County Water Authority

Turf Replacement Program


Now accepting applications for incentives!

Welcome to the San Diego County Water Authority’s WaterSmart Turf Replacement Program. We created this website to help our valued customers replace water-thirsty lawns with beautiful WaterSmart landscapes that are in harmony with our region.

Using water efficiently is a way of life in San Diego County and an important responsibility that comes with living in the beautiful Mediterranean climate that we enjoy. Working together, we can help ensure a reliable water supply while keeping the region prosperous and naturally beautiful for generations to come.

WaterSmart Landscapes provide a number of important benefits.
They include:

Saving Water

WaterSmart landscapes can use about 70% less water than traditional landscaping.

Beautifying Landscapes

WaterSmart landscapes can transform regular yards into neighborhood showpieces.

Reducing Maintenance

State-of-the-art irrigation systems and plants appropriate for the local climate can trim the amount of time spent on yard maintenance.

Minimizing Runoff

WaterSmart landscapes reduce the amount of polluted water that flows into creeks and ultimately ends up in the ocean.

Conserving Energy

WaterSmart landscapes demand less water be treated and transported across the state, saving huge amounts of energy.


Additional Funding:

Visit SoCal Water$mart to find out if you qualify for additional funding.


This program is made possible by financial support from:

  • The Bureau of Reclamation through a Water Conservation Field Services Grant
  • The California Department of Water Resources’ Integrated Regional Water Management Program financed under the California Water Security, Clean Drinking Water, Coastal and Beach Protection Fund of 2002

The Water Authority is particularly grateful to the Long Beach Water Department for special assistance developing content and other material for the website.

Here is the link to find out more information: 

Get Paid to Conserve Water

We just did this for our house and we’re getting over $2,200 to re-do our landscaping. The website states funds have been exhausted, but they just got funded 10 days ago. Any questions please don’t hesitate to call either Christian or Ivana. Remember you must be in the City of San Diego in order to apply for the Turf Replacement Rebate. Please click on the links below to find out more information on how you could save!


August 2012 Client Challenge

Hello Everyone,


Thank you for your referrals and sending us pictures and stories of your moving day experience. Please watch the video to see who is this month’s raffle winner.


Mowing down Pollution Lawnmower Trade-in

SATURDAY,  May 19 2012       8:00am – 10:00am
County Administration Center1600 Pacific Highway San Diego

Developed and hosted by Supervisor Ron Roberts, the event will feature the exchange of 650 gasoline lawnmowers for new, rechargeable battery-powered, Black & Decker CM1936 mowers with 19-inch blades and 36 volt power systems.

All residents of San Diego County with proper identification and a qualifying gasoline mower are eligible for this program. The price of the new mower is $99.99, thanks to a special four-year bulk purchase agreement and funding from air pollution fines. The mowers retail for about $420.

The exchange process is simple. The event is first come, first served. Traditionally, county residents line up well before the 8 a.m. start time.

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