New! Companion Units can now be processed over-the-counter. Detached one-story units, additions and conversions of garages or accessory structures all qualify. You can also submit permit-ready, no-cost building plans from the County of San Diego.  

The San Diego real estate market is experiencing a shift, with increased inventory and a cooling effect that is benefiting buyers. As of June 2025, the median sale price of a home in San Diego County was $917,500, down 3.3% since last year, according to a report from Redfin. This trend is part of a broader market cooldown, with more homes available for sale and longer days on the market, indicating a move towards a buyer's market.

• Increased Inventory: Single-family home inventory in Ramona has increased by 28.9% compared to June of last year, offering more options for buyers.
• Market Shift: The San Diego housing market is settling into a more familiar rhythm, with inventory up significantly and more options for buyers, leading to better negotiating power.
• Impact of Legislation: The "Big Beautiful Bill" has introduced changes that benefit homebuyers, including a higher SALT deduction and tax-deductible mortgage insurance premiums, making luxury homeownership more attractive.
• Foreign Buyers: A weakening U.S. dollar may make U.S. real estate more appealing to foreign buyers, potentially increasing their interest in the San Diego market.
• Price Trends: The median sales price for residential properties in San Diego County reached $900,000 in May 2025, marking a 2.9% increase over the previous month. However, the market is showing signs of adjustment, with prices stabilizing after a period of rapid growth.

 By David Garrick (The San Diego Union-Tribune)

Condensed from The San Diego Union-Tribune

San Diego is moving to scale back its generous accessory dwelling unit (ADU) incentive program after backlash over large-scale developments—most notably by developer Christian Spicer. Critics say Spicer exploited loopholes to build projects far beyond what ADUs were intended to be, including two with over 100 units each.

Spicer, who founded SDRE and now employs over 50 people, argues he’s building responsibly and within city rules to help address the region’s housing crisis. His use of the city’s ADU bonus program, which allows one market-rate ADU for every deed-restricted affordable unit built near transit, has drawn ire for enabling dense developments in single-family neighborhoods.

The city initially created the incentive in 2020 to spur affordable housing. But while most projects remain modest, a handful—primarily by Spicer—have triggered public concern over neighborhood impacts, infrastructure strain, and changes in community character. Critics, including the group Neighbors for a Better San Diego, say the city designed a flawed policy; others argue Spicer is simply following the rules.

Developer Daniel Shkolnik, who also uses the program, supports the incentive but says his smaller-scale projects have avoided the intense backlash Spicer faces. Housing advocates say large ADU developments can counter restrictive zoning but agree limits are needed.

Last month, the City Council voted 5-4 to cap ADUs per lot (4–6 based on size) after citing projects like Spicer’s 126-unit “Chalcifica” in Pacific Beach. Spicer criticized the cap but believes dense development will continue—just spread across more properties. Shkolnik was harsher, calling the rollback a retreat from pro-housing policy.

The council’s final vote is set for Tuesday.

Some 6% of pending contracts to buy a home were canceled in May, up from 5% in the same month last year.

By Alex Veiga, Associated Press | ap@dfmdev.com

LOS ANGELES (AP) — The latest sign of trouble in the U.S. housing market: A pickup in home purchase agreements falling through before they’re finalized.

Some 6% of pending contracts to buy a home were canceled in May, down from 7% in April, but up from 5% in May last year, according to data from National Association of Realtors. May is the third consecutive month with an annual increase in pending home sales cancelations.

A separate analysis of housing data by Redfin found that 14.6% of all pending sales in May fell out of contract, up from 14% in May last year, and the highest cancelation percentage for the month of May going back to at least 2017.

The trend underscores how even home shoppers who manage to ink a deal with a seller can end up having to back out because of unexpected costs, changes in their credit, employment or financial status, or a low appraisal, among other reasons.

“Stock market fluctuations, restrained consumer confidence and broader economic and geopolitical uncertainties may be leading to higher-than-normal cancellations rates in recent months,” said Lawrence Yun, NAR’s chief economist.

The U.S. housing market remains in a sales slump going back to 2022, as elevated mortgage rates and rising home prices nationally keep pushing the cost of homeownership well beyond what many would-be homebuyers can afford.

While sales of previously occupied U.S. homes in May remained at the slowest pace since 2009, pending U.S. home sales rose 1.8% from the previous month and increased 1.1% from May last year, NAR said Thursday.

A home sale is listed as pending when the purchase contract has been signed but the transaction has not closed. There’s usually a month or two lag between a contract signing and when the sale is finalized, which makes pending home sales a bellwether for future completed home sales.

A snapshot by Redfin of pending U.S. home sales for the four weeks that ended June 22, shows they fell 2.3% from a year earlier, the biggest drop in three months.

Economists at mortgage buyer Fannie Mae revised their outlook for existing U.S. home sales this week, citing expectations that the average rate on a 30-year mortgage will end this year at 6.5%.

Fannie Mae now expects existing U.S. home sales will rise 2% this year to 4.14 million. The economists’ previously forecast the sale of 4.24 million homes. Still, they project home sales will jump 9.5% in 2026 on the back of mortgage rates easing to 6.1%.

 🏘️ New San Diego Ordinance Aims to Preserve Affordable Housing

In a proactive step to protect San Diego’s supply of affordable housing, the City has enacted the Affordable Housing Preservation Ordinance, taking effect March 27, 2025. This new regulation is set to impact property owners of deed-restricted affordable housing across the city.

If you own a deed-restricted affordable housing property and are planning to sell, this ordinance introduces a few important obligations:

• Notice of Intent to Sell: You must provide at least three months’ advance notice before listing the property for sale.
   
• Notification Requirements: This notice must be:
   
  • Sent to qualified affordable housing entities listed by the California Department of Housing and Community Development (HCD).
     
  • Publicly posted on the San Diego Housing Commission (SDHC) website.
     
  • Displayed on the property itself.
     
• Right of First Offer: Qualified affordable housing organizations will have the opportunity to purchase the property at market value, ensuring these homes stay affordable for future residents.
   

This ordinance does not introduce new rent restrictions or limit the value of your property. Instead, it provides a fair process that helps ensure San Diego’s affordable housing stock is preserved — all while giving sellers access to competitive market terms.

For owners and stakeholders in the real estate and housing sectors, this is a pivotal development. It balances the goals of property investment and long-term community affordability — a win-win for all parties involved.

More details, including required templates and the list of qualified purchasing entities, are available on the San Diego Housing Commission’s official page.

For direct assistance, reach out to:

• Wendy DeWitt – Vice President of Preservation
  📧 wendyd@sdhc.org | 📞 619-578-7590
   
• Naader Ho – Special Programs Manager
  📧 naaderh@sdhc.org | 📞 619-578-7578

San Diego's real estate market continues to exhibit signs of stabilization. Homes are selling briskly, with a median time of 17 days to pending, indicating sustained buyer interest, particularly in neighborhoods like North Park, Chula Vista, and parts of East County.

However, affordability remains a pressing issue. Prospective homebuyers now need to earn approximately $241,200 annually to afford a median-priced home, which is about $135,000 more than the income required for renting. This disparity is fueled by rising home prices, elevated mortgage rates, and limited housing inventory .

Mortgage rates have reached their highest levels in three months. The average 30-year fixed mortgage rate has climbed to 6.86%, up from 6.81% the previous week. This uptick is largely attributed to a volatile bond market, driven by concerns over inflation, rising government budget deficits, and a recent U.S. credit downgrade by Moody's .

In a move to address housing affordability, the San Diego County Board of Supervisors has advanced plans to develop 224 affordable housing units on surplus county-owned land. These developments will bring deed-restricted homes to the City of San Diego’s Mid-City area and downtown Escondido, aiming to alleviate the housing shortage for low- to moderate-income residents.

Nationally, the housing market is experiencing a disconnect between sellers and buyers. Nearly one in five home listings saw price reductions in April, yet buyer activity remains subdued. High mortgage rates and elevated home prices are contributing to buyer hesitation. Zillow forecasts a modest 1.4% decline in national home prices, though certain markets could see steeper decreases if a recession occurs .

President Donald Trump has announced considerations to take government-backed mortgage giants Fannie Mae and Freddie Mac public. These entities currently support about 70% of the U.S. mortgage market. Economists caution that privatization could lead to higher mortgage rates, exacerbating the housing affordability crisis .

The real estate landscape is in flux, with market stabilization in San Diego juxtaposed against affordability challenges and national uncertainties. Staying informed and consulting with real estate professionals can help navigate these evolving conditions.

Stay tuned for our next update, and feel free to reach out with any questions or topics you'd like covered in future editions.

In response to a tragic 2015 balcony collapse in Berkeley that claimed six lives and injured seven others, California has enacted two new laws to enhance the safety of elevated structures in multifamily housing.

California’s Senate Bill 326 (SB 326) and Senate Bill 721 (SB 721) introduce mandatory inspection requirements for balconies, decks, and elevated walkways in residential buildings:

• SB 326 targets condominiums and homeowners associations (HOAs) with two or more units.
• SB 721 applies to apartment buildings with three or more units.

These laws aim to identify potential safety hazards in load-bearing structures and prevent future accidents.

The original inspection deadline of January 1, 2025, has been extended to January 1, 2026, allowing property owners and managers additional time to comply.

Inspections must be conducted by a licensed architect or structural engineer, who will assess:

• The current physical condition
• The remaining useful life of the structure
• The status of associated waterproofing systems

A formal report must be submitted to both the property’s board of directors and the local code enforcement agency within 15 days of the inspection's completion.

The cost of inspections will vary depending on the property’s size and the number of elevated elements, with estimates ranging from $5,000 to $20,000. While this may be a substantial investment, the potential to prevent catastrophic failures and save lives underscores the importance of compliance.

Failure to comply with these inspection mandates can lead to fines and enforcement actions. These regulations are part of California’s broader efforts to ensure that residential structures remain safe and habitable.

Tariffs can have both positive and negative effects on real estate, depending on the specific context, sectors impacted, and how markets respond. Below are positive impacts tariffs might have on the real estate market:

When tariffs are placed on imported goods—especially construction materials or manufactured products—they often encourage domestic production. This can lead to:

• Increased demand for industrial and warehouse spaces, as domestic manufacturers ramp up production.
• Growth in logistics hubs and distribution centers, especially near ports or transportation corridors, due to reshoring trends.
• Investment opportunities in secondary markets where industrial land is cheaper and more available.

Tariffs on foreign construction materials like steel, aluminum, and lumber may:

• Benefit domestic suppliers, leading to expansion and new facilities.
• Generate demand for commercial development, including showrooms, production plants, and administrative offices tied to the construction supply chain.

If tariffs successfully stimulate domestic industries:

• Local economies may benefit from job creation, increasing consumer spending.
• This can lead to a rise in demand for residential real estate, especially in areas with expanding manufacturing bases.
• Positive spillover effects on retail and mixed-use developments as local populations grow and require services.

In some cases, tariffs may protect local industries from foreign competition, allowing them to:

• Maintain stable employment levels during global economic shifts.
• Sustain housing demand and reduce volatility in regional real estate markets, particularly in areas reliant on a specific industry.

Tariffs that redirect trade flows or manufacturing hubs could:

• Increase the strategic value of industrial real estate in non-coastal regions.
• Lead to re-zoning or land appreciation in areas previously undervalued.

 US Mortgage Interest Rate News

The average 30-year fixed mortgage rate in the U.S. has risen slightly to 6.67% as of March 20, 2025, from 6.65% the previous week, according to Freddie Mac. This marks the second consecutive week of modest increases, though rates have generally been declining since mid-January.

• Current Rates: The average 30-year fixed mortgage rate is 6.67%, up slightly from 6.65% the previous week.
• 15-Year Fixed Rates: The average rate on 15-year fixed-rate mortgages also rose to 5.83% from 5.80% last week.
• Recent Trends: Mortgage rates have been mostly declining since mid-January, following the 10-year Treasury yield, which has fallen due to economic concerns and the impact of tariffs.
• Fed Decision: The Federal Reserve kept its benchmark interest rate unchanged at 4.25% to 4.50% on March 19, 2025, and signaled it expects to cut rates twice this year.
• Housing Market Impact: Despite the slight increase, rates have stayed under 7% for nine consecutive weeks, which is beneficial for potential homebuyers and sellers as the spring homebuying season ramps up.

• Sam Khater, Freddie Mac’s Chief Economist: "The 30-year fixed-rate mortgage has stayed under 7% for nine consecutive weeks, which is helpful for potential buyers and sellers alike."
• Mike Fratantoni, Chief Economist at the Mortgage Bankers Association: "In the near term, we expect mortgage rates to remain in a fairly narrow range, between 6.5% and 7%, which should support the spring housing market."

• Inflation and Tariffs: Concerns about inflation and the economic impact of tariffs are influencing mortgage rates. Tariffs can drive inflation higher, which could push up mortgage rates.
• Economic Growth: The Fed's decision to keep rates steady and its projection for economic growth are influenced by factors such as tariffs and policy uncertainty.

• Rate Cuts: The Fed expects to cut rates twice this year, which could further influence mortgage rates and the housing market.
• Housing Market: The U.S. housing market has been in a sales slump since 2022, with sales of previously occupied homes down from the previous year.

These developments suggest that while mortgage rates have seen a slight uptick, they remain relatively stable and supportive of the spring homebuying season.

San Diego's real estate market is showing steady growth into 2025, with median home prices reaching $1,030,000 in January 2025, reflecting an 11.4% increase year-over-year. Despite elevated mortgage rates, the market is resilient, with San Diego outperforming the state, up 4.6% compared to January of the previous year.

According to Zillow's forecast, San Diego is expected to see a 0.1% increase in home values by January 31, 2025, followed by a slightly higher 0.6% increase by March 31, 2025, and a 3.6% increase by the end of 2025. The market is not anticipated to crash, but rather to continue a slow but steady increase.

San Diego's housing market remains strong, with increasing home values and steady demand. The average home is currently priced at $935,237, and homes are selling in around 27 days on average. Active listings are available, and sales price data as of November 30, 2024, shows a 4.3% increase in the average home value over the past year.

The market is characterized by high demand and limited supply, driven by San Diego's desirable location, strong local economy, and vibrant lifestyle. Interest rates, inventory levels, economic growth, and population growth are key factors influencing the market.

San Diego's allure is undeniable, with its pristine beaches, perfect weather, and vibrant city life attracting residents and retirees. However, the limited developable land and finite housing stock create a competitive seller's market, pushing prices upwards.

For those considering buying or selling, it is recommended to keep an eye on these projections and consult with a local real estate expert to make informed decisions.

California is confronting an unprecedented "triple threat" of escalating housing prices, interest rates, and insurance premiums, exacerbated by the recent devastating fires in Los Angeles County.

Redfin CEO Glenn Kelman highlights that this confluence of challenges is unparalleled, with the fires alone causing an estimated $28 billion in insured losses and $150 billion in total damages.

The state's stringent land-use and environmental regulations have historically hindered development, but the pressing need for reconstruction may prompt a reevaluation of these policies. Governor Gavin Newsom and LA Mayor Karen Bass have pledged to expedite rebuilding efforts by reducing bureaucratic obstacles.

• While this initiative aims to address the housing crisis, Kelman cautions that the character of many neighborhoods may change due to increased density in the rebuilding process.

Accessory Dwelling Units (ADUs) have been gaining popularity in San Diego and many other areas across the United States for several reasons:

1. Increased Housing Options: San Diego, like many other urban areas, faces housing shortages and high housing costs. ADUs offer a way to increase housing options within existing residential areas without the need for large-scale development projects.
2. Additional Income: Homeowners can benefit financially from ADUs by renting them out to tenants. This additional rental income can help offset mortgage payments or provide supplemental income.
3. Multigenerational Living: ADUs provide an opportunity for multigenerational living arrangements, allowing families to accommodate elderly parents, adult children, or other relatives while still maintaining some degree of privacy and independence.
4. Flexibility: ADUs can serve various purposes, including rental units, guest houses, home offices, or even personal living spaces for homeowners. This flexibility appeals to homeowners looking to maximize the utility of their property.
5. Zoning Regulations: Changes in zoning regulations and permitting processes in San Diego and other areas have made it easier for homeowners to build ADUs. Relaxing restrictions on ADU construction has encouraged more homeowners to consider adding these units to their properties.
6. Environmental Benefits: ADUs can promote sustainability by utilizing existing infrastructure and reducing the need for new construction. They also offer opportunities for energy-efficient design and can contribute to more compact, walkable neighborhoods.

We at Fidelis Private Fund have been financing ADU projects since the the demand to finance such projects started gaining popularity a few years back. This trend aligns with our commitment to providing innovative financing solutions that support sustainable and affordable housing initiatives.