Low inventory continues to be the story as the San Diego real estate market heads into the holidays. It is typical for the market to slow down at this time of year and all indications are that we will continue this trend.
Demand however is still strong fueled by low mortgage interest rates and a shift in priorities due to the changes in the employment sector. With many buyers being able to work from home, they are searching for more bedrooms, home offices, space for a home gym, and room for kids to play. This trend has placed a premium on detached single family homes which have seen the Average Sale Price increase 23% over the last year versus only 18% for condos and townhomes. Home builders have had a rough year with supply chain disruptions and challenges with labor, so it is unclear if they will be able to help with the inventory shortage in the near future.
Home sellers who do not need to buy a replacement home are best positioned in this market, and many people are selling their rental properties trying to cash out at the peak. Sellers who need to buy a replacement home have tough challenges in multiple offer scenarios if their purchase must be contingent upon the sale of their home. Home buyers are still likely going to encounter bidding wars and fierce competition from aggressive buyers, especially for detached single family homes.
End of the California Eviction Moratorium
On September 30, the COVID-19 Tenant Relief Act (CTRA) expired. However, that does not mean everything
just goes back to pre-pandemic rules. Instead, a new law, the COVID-19 Rental Housing Recovery Act, has
taken its place.
Certain Exemptions to the Just Cause Eviction Requirements are Back
As of October 1st, the standard exemptions to the just cause eviction rules returned, most significantly the
exemptions for single family properties and properties built within the last 15 years (make sure the exemption
notice, form RCJC, has been integrated into the rental agreement). Generally, for exempt properties, the
landlord may terminate tenancy without fault with a 60-day notice. Of course, keep in mind that local eviction
just cause rules may be more stringent.
New 3-Day Notice Procedures and Requirement to Apply for Rental Assistance
There are two new requirements for eviction proceedings. Beginning October 1: 1) a landlord may demand the
full amount of rent using a special 3-day notice to pay rent or quit for rent that became due on or after
October 1; and 2) The landlord may only proceed to file an eviction lawsuit if the emergency rental assistance
has been denied or if the tenant has not cooperated in the application process for 20 days after service of the
notice. The requirement to have applied for rental assistance and have received a denial (or for the tenant to
have refused to cooperate) applies to any eviction lawsuit filed between October 1, 2021, and March 31, 2022.
It is recommended that landlords file for emergency rental assistance prior to serving this 3-day notice.
For Rent due between September 1, 2020, and October 1, 2021, the 15-day notice is still required
The CTRA required landlords to provide a 15-day notice to pay rent or quit, with a blank declaration of COVID
Financial Hardship. If the tenant signed and returned the declaration, no eviction can be filed, and the tenant
had until September 30th, 2021, to pay at least 25% of COVID rental debt (rent that came due between
September 2020 and September 2021). If proper notices were given at that time and the tenant did not make
the 25% payment, the landlord may proceed to eviction. However, the landlord must still show that they
applied for and were denied rental assistance. If the tenant was not previously given the 15-day notice for rent
that became due between September 2020 and September 2021, then they must still be given a 15-day notice,
even if served after October 1.
Exclusion for Tenancies that Start on or After October 1, 2021
If the tenancy has commenced on or after October 1, 2021, then it will not be necessary to apply for
emergency rental assistance before filing an eviction lawsuit; however, the landlord should nonetheless still
use the special 3-day notice to pay rent or quit. Remember: a "new" tenancy means that all of the occupants are
new occupants as of October 1, 2021.
NOTE: The above explanation is a simplified version of a very complicated procedure. Furthermore, local
cities and counties may have tenant protections in place beyond what state law requires. Even though C.A.R.
may make forms available for landlords to use, all persons are strongly urged to work with their own
landlord/tenant attorney specialist before providing these notices, especially if their ultimate aim is to evict
through a court procedure.
Source: CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.)