SAN DIEGO—Speakers at Burnham-Moores'15th-annual residential eal estate conference Thursday said aconfluence of factors is preventing median-priced homes from beingbuilt here and creating a supply-and-demand situation that isdriving up prices to unsustainable levels. The panel, in additionto keynote speaker Norm Miller, Ernest W. Hahn Chair ofreal estate finance at Burnham-Moores Center for RealEstate at the University of San Diego,said San Diego is in a crisis mode as far as having enoughhousing units available to meet our needs now andin the future; homes are not affordable to the middle class; thereare not enough for-sale single-family homes in ourinventory; and all of this may negatively impact San Diego'seconomy.

Miller said the housing sector is doing great thanks to lowunemployment, and he doesn't expect anotherrecession to hit until 2019. He cited stats fromCoreLogic that forecasted interest rates rising 1%in the short term and .5% in the long term and housing prices torise 4% to 5% during 2016. Household formations was up in 2015 by1.7 million units, but the average age to buy has risen to 31, duein part to large amounts of college debt stemming affordability. Asmuch as 20% of income is used to pay the student debt of 40% ofyoung borrowers, and the homeownership rate isunder 64%, heading down to 62% before bottoming out, he said. Theforecast for San Diego is a 7% increase in home prices for2016.

A national lack of housing supply since 2012 has been helping todrive up prices, with next to no inventory under $600,000. Manyhomeowners still have negative equity and creditissues leftover from the recession, said Miller. The worstforeclosure states are Nevada, Arizona andFlorida, with California a little under the national average.Still, foreclosures are coming down, REOs are inthe normal range and underwriting remainscautious. However, NIMBY-ism is a big factor deterringdevelopment.