SAN DIEGO — Some new laws are impacting real estate this year in California as well as a changing market. That was the focus of the Greater San Diego Association of Realtors annual ‘New Laws and Industry Outlook’ event, held in La Jolla on January 12th.
Hundreds of real estate professionals from all over San Diego County attended the one-day conference where topics ranged from canceled fire insurance policies to mortgage rates dropping.
"We have all the industry leaders come and speak to our realtors on how to navigate through the new laws and what's going on," said Frank Powell, President of the San Diego Multiple Listing Service.
AB-1033: Ability to sell ADUs
Powell says a major topic of discussion was AB-1033, a new state law that gives cities the option to allow homeowners to sell their ADUs separately from the main house.
"Before, we could just build it, somebody can rent it, but now we're going to offer you to sell it and what that does is it incentivizes those who can’t afford housing to buy something they could afford, like a 600 square foot ADU, auxiliary dwelling unit or what's also known as the granny flat," said Powell.
The catch - the person selling will have to create an HOA.
So far, San Diego and its surrounding municipalities haven't signed on to allow homeowners to sell their ADUs.
If they do, Powell says they'll have to consider the pros and cons. “Some people don't want an ADU because of the parking situation. Some people do want an ADU because it helps them with the rent and helps them get other additional income," said Powell.
A change in mortgage rates
Another big shift in 2024 has to do with mortgage rates. They've come down in recent weeks and experts believe they'll continue doing so, a far cry from the eight percent rates we saw in 2023.
"We're back down in the high sixes. And then we're looking at the Feds to make three more adjustments to the interest rates, which hopefully will keep going down," said Powell.
Powell says that means more people will be able to afford a home but that drives up competition in a market where supply is still low.
"So, the strategy is if you buy now at a high interest rates you'll get the house for a little lower. And you can always refinance with interest rates go down," said Powell.
"Even though I'm in the business, I want a broader perspective of that," said Derrick Luckett, a broker with Destiny Six Financial Mortgage and Real Estate Services.
Luckett attended the conference, saying it was crucial for his business.
As for what his clients care about most, "Home affordability. Can I afford a home? What makes me want to be in a home? Why should I own when I can rent and not have the headache of it?"
WATCH: New ADU laws come to California as 2024 begins