Just as the median price of a single home has now hit $1 million in San Diego County, California lawmakers are considering a bill that would help first-time home buyers increase their buying power.
The California Dream for All (CDA) program is the next step for lawmakers addressing the lack of affordable housing in the state.
The CDA program, proposed by State Senator President Pro Tempore Toni Atkins, creates a $1 billion fund to help loan first-time homebuyers 17% of a home's purchase price for a down payment. If they refinance or sell their home later, the state is reimbursed for their 17%.
California's low inventory and inflation are raising home prices in an already expensive state. Hopeful first-time home buyers like David Kao and his fiancé are experiencing this firsthand.
“Even writing a nice letter to the seller. You know, introducing ourselves, introducing our puppy, telling them we're trying to find a yard for him to run around. And obviously, that's not gonna have as much leverage as a cash offer,” said Kao.
Kao and his fiance both have stable jobs as pharmacists and they're looking to upgrade from their one-bedroom apartment.
In fact, Kao said he recently made an offer over a $924,900 asking price for a home in Poway, but was outbid. He said the home went to someone that offered a 50% down payment and waived contingencies.
“It's difficult because as much as we want to try to compete with these people by trying to increase our buying power or just being less picky with the first home we're trying to get into, when push comes to shove, you know, someone with a lot more money or more buying power is going to win,” said Kao.
Kao's real estate agent, John Freeman with Pete Knows Real Estate, said the state program provides a loan, not a grant, and will definitely help the affordability crisis in California.
“There's just gotta be a way to get these people into homes, because if they don't get in now, who knows, in the next 20 years, if they'll be able to afford houses in the future,” said Freeman.
But low inventory is still a problem. Several bills in the legislature address the shortage of units.
"As of right now, there's only 66 properties that are a three bedroom, two bathroom, 1,000 square feet that are available to purchase,” said Freeman.
Kao will continue to look for a new home.
“I mean, I'm no economist. I think it's very extreme. I feel like it could be very helpful, but at the same time, I don't know if it's really addressing the issue of the rising home prices,” said Kao.
But at the very least, he told NBC 7 the state's proposed next step does give him some hope that help may be on the way to being a homeowner in San Diego.
You can find more details about the program here.