There is one type of home an American prefers to dwell in and after several generations it remains the most coveted.
A single-family home — not an attached condo or townhouse — was the preferred house to purchase for more than 75 percent of potential buyers surveyed by the National Association of Realtors.
However, the traditional house has continued to be the most scarce type of home built in San Diego County, driving up prices and competition. There are at least 940 new single-family homes available for sale this year, although that number will likely go up as developers roll out plans.
Even with more homes eventually on the way, the initial number of 940 is down from roughly 1,500 new homes expected at the start of 2017 and 2016.
Building permit data is still being compiled for 2017, but it is looking like single-family home construction noticeably increased toward the end of last year. But, it isn't coming after a boom. In 2016, 22 percent of residential construction was for single family — its lowest in records going back to 1980, said real estate analysts London Moeder Advisors.
"The problem isn't just the sheer numbers," the firm's senior principal Gary London said. "It's a fraction of the numbers we used to produce."
He said a lack of single-family homes will harm the nation's largest generation, millennials, who are starting families. The Realtor survey found 75 percent of the group would prefer to own a single family home, 13 percent a townhouse and 12 percent a condo. London said the rarity, and price of new homes, will mean millennials will leave the region or end up raising families in apartments.
The average price for new houses coming out this year is roughly $877,000, with most new development in Otay Ranch, Del Sur and East County. The average size of new homes: 2,728 to 3,581-square-feet.
Distance from work is often something eager buyers consider. Adam Ging, a 29-year-old analyst for San Diego County purchased a 1,502-square-foot single-family home in Ramona at the end of last year.
He said he had considered buying a condo or townhouse since about 2015. Eventually, he decided on a single-family home because he said homeowner association fees actually would push him over what he could spend.
"That's what I looked at because that's what I thought I could afford," Ging said of condos. "I knew it was going to be tight, and throwing HOAs on top of that it was just going to be more difficult. Also, I really wouldn't be building as much equity because a lot of it would have to go to the HOAs."
While he works about 25 miles away in San Marcos, staying in Ramona — where he grew up — allowed him to get a home for $419,000 instead of San Marcos where the median resale home price ranged from $514,750 to $940,000. Ging worked with the same real estate agent, Jan Ryan, for years while he saved money and considered his options.
"I pretty much always wanted to own rather than rent," he said. "I like the fact that I'm not just throwing money away that I'm not getting any return on. It's not paying someone else's mortgage."
The newest homes can be costly
One of the biggest and most expensive new developments is Artesian Estates in Del Sur. The homes range from 4,223 to more than 5,600-square-feet. Prices start at $1.89 million and some have a four-car garage, up to five bedrooms and five bathrooms, wide-open floor plans and multiple fire places.
Sliding doors to open up the home to the outdoors and glass chandeliers just scratch the surface of the amenities, which include access to 14 parks.
There will be 39 homes in the CalAtlantic Homes development and 21 have already sold.
Bill Ostrem, San Diego division president for CalAtlantic, said there is a demand for newly built homes of Artesian's size. Several buyers have purchased these homes after downsizing from mansions in Rancho Santa Fe.
"While the market is a little thinner at this price point, there is a demand for new product," he said. "At this price point you see (resale) older homes that don't quite have the new floor plan designs incorporating indoor/outdoor living, large kitchen and family room configuration. This actually provides something new and fresh in the market at that price point."
The project won a national award recently for its design and details. It won second place for Best Architectural Design of a single-family home from the National Association of Homebuilders.
CalAtlantic Homes is not just building luxury. It also is selling homes that start at $541,900 at the Indigo project in Otay Ranch. It is common for builders to try and cater to different parts of the market.
"There seems to be a niche for every type of product out there right now," Ostrem said.
Pardee Homes, which is selling nearly 200 single-family homes in San Diego County this year, has made it a practice of diversifying its housing stock. It sold 180 single-family homes last year and 180 multi-family units.
"The consumer wants choices," said Jimmy Ayala, division president for Pardee in San Diego. "We're offering entry-level townhomes in the South Bay from the high $300,000s to $400,000s to a luxury $2 million+ home in North County coastal area."
Lower cost options can be found
Buyers who cannot afford high-end new homes may find themselves in Otay Ranch where newly built houses are less expensive than in other parts of the county.
At the Skylar at Millenia project, developer KB Home has squeezed in as many single-family homes as it can to its site, roughly 11 units to the acre. There will be 12 to 15 feet between the houses, which maximize square footage by being built three stories high.
Houses at Skylar range from $596,490 to $613,490, making the project one of the cheapest new developments in the county.
"We survey our buyers, so we know what the buyers in the area want," said Steve Ruffner, coastal division president for KB Home. "They want less maintenance but want to have their own yard, their own driveway to park and the two-car garage."
The benefits of a single-family home mean actually owning the land and no homeowner association fees. However, the homes at Skylar do have a type of homeowner association fee that pays for parks and amenities that will be around $146 a month once all the homes are built.
Homes in Otay Ranch also pay a Mello-Roos fee, a special tax levied in addition to property tax to pay for infrastructure. In Skylar, the Mello-Roos fee will be around $383 a month.
Buying a home in Otay Ranch also means living about a half hour from downtown where many residents may work, but it does have some benefits. Skylar homes, which are on an angle, means sunlight hits all four sides throughout the day. Views from some units include the ocean (although it may be blocked by future housing) and Tijuana's General Abelardo L. Rodriguez International Airport.
London, the real estate analyst from London Moeder Advisors, said the development at KB Home is a solution to housing shortages.
"My argument is more homes like that can be built throughout the region, not just in South County," he said. "The way to do that is make the separation between the homes even skinnier — not 12 to 15 feet — but a couple of feet."
What the future could hold
To maximize land throughout the San Diego region, it will be more likely that multifamily building will dominate in the coming decades.
Cheryl Young, senior economist at Trulia, said condos and townhouses have an important role in the economy as a way for first-time buyers to enter the market.
"Those are great homes for that starter home market," she said. "They tend to be smaller. It can add supply into the market at the bottom end. If we see more multifamily, we might be able to see more people crack into the market for the first time."
Plus, she said the nation could use as much homes as it could get.
"At this point in the conversation, we are looking for any type of housing supply," she said.
If there was a shift in building to more single-family homes, University of San Diego economist Alan Gin said it could be good, in some ways, for the economy.
"In terms of economic activity, single-family actually generates more," he said. "Imagine a 100-unit apartment complex vs. a 100-unit single-family homes. The homes just take a lot more personnel and materials to build."
San Diego had the fourth highest price gains in the nation in November, said the S&P CoreLogic Case-Shiller Indices. The popular real estate index, which tracks repeat sales of identical single-family houses as they turn over through the years, said San Diego home prices had risen 7.4 percent in a year.
David Blitzer, managing chairman of the Index Committee at S&P Dow Jones Indices, wrote in the report that fewer single-family homes were being built across the nation, not just Southern California.
He said from 2010 to the present, there were roughly 632,000 single-family home starts a year. That's much less than slightly more than one million a year from 1959 to 2000.
"Without more supply, home prices may continue to substantially outpace inflation," Blitzer wrote.