SUBSCRIBE: ‘Rental Market Update’

    Welcome back to the financial advisors, I’m Certified Financial Planner Aubrey Morrow, every Saturday about this time I say hello to Doug Taber. Doug is a certified commercial investment member, Doug’s with the rental housing Group at Keller Williams. And Doug specializes in selling apartment and rental properties. Bill Exeter is off this weekend. So it’s gonna be Aubrey and Doug up until the nine o’clock hour. And folks, as I just mentioned, you can watch our one hour webinar, you can take a little time off between nine and 10 fire up your computer just before 10 o’clock today. And type in three words, those words are And the very first person you’re going to see is a person I’m gonna say good morning to which is Doug Taber CCIM.

    well, hello, Aubrey, hello everybody out there checking in from a beautiful and soggy East County, San Diego

    and a little rainy back and forth. We had rain yesterday afternoon and who knows what’s going to happen today Doug, Doug cyber a little bit about the real estate marketplace maybe about Doug taper your background, what you do. And then obviously, an update Doug on our southern California real estate marketplace. Doug Taber.

    Yes, sir Aubrey? Well, we love giving our rental market update each week. And we focus on the residential rental market, because let’s face it, everybody needs a home. You know, there’s a lot of asset classes, but this is our sweet spot. I sell apartment buildings and rental properties throughout San Diego County, which means that I should be focused on this market. So, you know, when it comes to rental properties, Aubrey is you know, as your as your listeners may know, the strength of the economy is key. You know, when I went through my CCI M training, about five or six years ago, the one thing I learned that was most important, as most economists know, is the strength of a local economy really depends on that strength of the local job market. And as you know, this week, we got a big jobs report came in really hot. And you know, when you look at San Diego County, when you look at Orange County, southern california in general, we just have an Rankin jobs market, you know, everything on the unemployment rates been under 5%. I mean, it peaked to 5%, about six months ago just for two months, but then it came back down. It’s been under 5%, which is what municipalities governments want to see. And we’re just really strong here especially in in San Diego, we have a lot of folks that are moving their companies here. And what that is causing is all these strong jobs, all these six figure jobs that are coming into our county, especially the ones that are you’ve probably heard about this already. They’re coming down from LA County, they’re coming down from the Bay Area, because quite frankly, you know, here in San Diego, we are a better option. And we’re a little cheaper than those areas. So we get a lot of folks moving down here. And it’s really causing a big issue with our housing shortage, but it’s keeping those vacancy rates down. We talked about those a little bit last week. We are really under 5%. On across the board pretty much in vacancy rates in San Diego County. And as you know, I track these numbers on a weekly basis by region. And really the only areas where our vacancy rates are above 5% are way up there is really downtown San Diego, you know, they’re putting out a lot of units out there. Hillcrest, they’re building a lot of units. Those areas, Chula Vista is a little bit of a Five Percenter in the 6% range. But most of most of San Diego County stays below 5%, which is good. If you own properties, rental properties, it means you have no vacancy. And one thing we do every one of those terrible teas that our landlords dislike is turnover. So no vacancy equals no turnover, which is always good. And all of that helps our property values to remain extremely strong. And right now, particularly in the single family in two to four unit asset classes. I had the good pleasure of going to the Burnham Moore’s residential real estate outlook this week. It’s a great event happens once a year. A lot of developers there’s excellent panel of folks. But what they were talking about is that there’s just a shortage of single family properties. You know, and building. It’s just it’s just not moving quickly. And one of the main issues is litigation. There’s a lot of developers, one of the bigger developers was telling us how they’re getting sued on a regular basis, stopping all the development of these projects, these new single family projects, and the cost of labor is through the roof. So it’s hard for folks to build new product especially on the single family of course or cities, especially San Diego, the city of San Diego, and municipalities, they want more density. So they want more apartment buildings more multifamily. And they you know, they did a a, a test of the audience of show of hands and who wanted to live more single family. So everybody’s hands went up that they wanted to live in a detached single family home. But yet, you know, the municipalities want more density, more apartments. So, you know, there’s kind of some conflicting interests there. And the bottom line is, it’s just making the values of your single family properties go up, up up, you know, I changed the numbers around this week, and I pulled out the the attached single family, the condos, and I just did single family detached here in San Diego County. The median price is $975,000, for a median price home Aubrey, which you and I have talked about before. That’s just incredible. You know, that’s, that’s good news. If you own real estate, certainly difficult if you’re a buyer. So that’s the good news. If you own real estate, really any rental real estate, including multifamily, including industrial, I mean, even office space, although that, you know that asset classes is going to have some issues over the next 12 to 18 months because of the high interest rates. You’re sitting in the driver’s seat. So for those folks who, as we know, own real estate, you’re doing well. Of course, there’s not a lot of, of there’s not always good news, there is some bad news out there with a strong jobs report. Aubree you and I both know that that usually causes higher mortgage interest rates. I know it’s not fair. But with the strong jobs report, the bond market takes off and those interest rates just react. So you’re 30 fixed, more 30 year fixed mortgage interest rates have gone up. They’re still hovering around 7%. But, you know, couple that with the fact that the Fed did not move, as you probably mentioned earlier in the show, this week that interest rates have not come down. That’s a big concern for everybody, especially with these higher prices, you know, $975,000 property 7% interest rate when you do the math, it means a heart attack every month when you got to pay that mortgage. And then, of course, the big the big news really here locally in San Diego, as the storms have caused major flooding, particularly in southeast San Diego, I have clients that really had a lot of problems with their properties getting flooded out. You know, there’s a lot of blame going out there. A lot of folks say, Well, it’s because that they didn’t clean out the storm drains and, you know, whatever the case, the San Diego Board of Supervisors for the county decided to get involved and they had an emergency meeting on Tuesday. And they voted to implement a short term rent control situation where you can’t raise rents or evict folks in certain zip codes because of the flooding. You know, the Apartment Association, the Southern California Rental Housing Association got involved. They’re wondering why they were doing that, you know, what was the purpose? You know, there wasn’t a lot of specifics, but the Board of Supervisors for the County of San Diego voted in favor of implementing that 60 Day Program. And it just always gets, you know, a little nerve racking when they are just kind of like they did with COVID putting programs in place that haven’t been well thought out, haven’t been well defined. And you know, what does this mean for owners who own in these zip codes. So if you have questions about that you need more information, you could sign into my newsletter rental market And I we put them some information out on it. And then of course, the other one, property insurance. I’ve talked to some more folks, owners this week, and their property insurance got cancelled because they submitted a claim for some mailbox violence and boy, their insurance, tripled, went up 300% for their premium and we’re hearing a lot of that out there. So those are the big negatives but again, positive is if you own any type of properties, San Diego County and probably Southern California for that matter you’re definitely in the driver’s seat

    and talk I mentioned that the first part of the show the people that we’ve worked with for many many years bought their rental property a long long time ago, we put up with a put up what we call those terrible tees dug those tenants and toilets and trash and and we flash forward some 25 to 30 years later, the hairs got a little grayer they are their attitude maybe times jug has changed from being a property manager dealing with those tenants and toilets and trash maybe to enjoying the the equity they have in their property. So from one perspective, this is sort of Goldilocks time. Doug as you just mentioned, is Goldilocks Many people own property, because if they’re ever thinking about selling their property, the price is extraordinarily high today. And you just mentioned, Doug, we have a little supply. We’ve continued to big demand, and it’s certainly keeping real estate prices high. So again, it’s sort of a challenge. It depends on what side of the equation you’re on. If if you are interested in buying a property, you’re probably going to be overpaying, you’re going to be getting a big mortgage. However, Doug, if we look back, remember, I bought my first property some 40 years ago, Doug, I paid I think 89 grand for it’s worth a million and a half today. So even mortgage rates are a little high, a seems to be a little high, but Doug got paid over 10% From my mortgage many years ago. The key I think, is getting into buying a property any way you can get into buying a property maybe refinancing at a later date. But again, Doug, the people that are sitting in the driver’s seat, as you said, are the people that own property for a long period of time they put up those tenants until it’s fresh and done. And you just mentioned all these new restrictions from the City Council on I hate to say this, but favoring the tenant not favoring the owner of the property depends on which side of the equation you’re on. Folks we’re gonna take a little break and stuff and Michael the does desk and the timer and how to come back and talk more about real estate and maybe some case studies of within and not o’clock hour can watch our webinar today at 10 at rental owner gonna take a little break and turn back for more videos.