Business Report: Signs Of A Housing Market Return In San Diego
Monday, September 30, 2019
Q: Now we're seeing new signs of strength in the housing market. Can you tell us what's happening on a local and then a national level?
A: It’s been a little bit of a difficult market in San Diego. Our housing prices have increased year to date through July, 2%, which is doubling from where we were at the end of June. So, that's great news. Actually, we're leading the way in terms of housing price increases, which is good and bad news for some versus any other city in the state of California. San Francisco saw no increase in prices. L.A. just 1.1%. One of the reasons why compared to last year saw a really high growth. We saw 6% increases in housing prices, and a lot of this is because of the new tax code following the 2017 tax law, that limits the amount of interest that an individual can deduct up to only $10,000.
So with high-cost homes in the city and in the state it kind of dampens a little bit the growth in prices. And on a national level, what's happened is actually the number of home sales has increased by 17% in the last month. August is generally you know kind of at the end of the summer buying season and it has been six quarters of contraction in the number of homes sold in the US. And August was a big turnaround.
The growth has all been out on the West Coast, that saw 17% increase in home starts. In the South, which saw a 6% increase in home starts, but the Northeast and the Midwest saw big declines in housing starts. So it might suggest that although there may be some optimism, it's not really national.
Q: Now, we're coming up on two years of legal marijuana sales, but businesses still can't use traditional banking methods. How is Congress trying to change that?
A: Congress just passed the Safe Act — it stands for Secure and Fair Enforcement Banking Act of 2019 — by a pretty big margin, 320 votes to about 100 votes. What it does is it allows growers, dispensaries, manufacturers of cannabis products to actually bank with federally chartered banks. Right now, these organizations cannot bank. They can't take credit cards. They can't get loans. So for people who go, they have to pay cash. Sometimes they don't have the cash. So what it also happens, is it takes away a little bit from the tax base because if you are able to open it up where I can expand these businesses or I can accept credit cards, the demand might actually go up quite a bit.
Right now the risk for these businesses is not only the fact that they have to take all cash. They're targets for crime, both extortion or they can be robbed and stuff can be taken, because of where they're putting the cash. And also, they can be targets for money laundering. One of the reasons the banks are really nervous and why they're very glad and they supported this act, is that it protects them from money laundering suits from the federal government. That's super important for banks, in order to feel comfortable, because they claim, 'Look, these businesses are here they're improving the community they should be part of that growth.'
Q: We heard about TwitchCon and, of course, the measuring stick in San Diego is Comic-con. Tell us how Twitchcon stacks up.
A: Twitchcon is about five times smaller the Comic-Con. Comic-Con gets 130,000 people. It's a global event, but you know it, Twitchcon is quickly rising. It launched in 2015. It's actually supporting an individual platform, Twitch, which is actually owned by Amazon. Amazon bought it in 2014 for a billion dollars, and in the last three months alone over 2.7 billion live streaming hours have been viewed on Twitch, which is bigger than YouTube gaming, and Facebook gaming combined, by a factor of three. So, this is really big.
This is the second time they've been back in San Diego. It looks like they're going to come back a third time, and the event is so big there's gonna be a big concert at Petco Park. A lot of costume play, so it's very reminiscent of Comic-Con, and there's gonna be an American Idol-like singing contest where someone's gonna get a record deal. So, pretty fun thing to do.
Anica Colbert contributed to this story.
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