SAN DIEGO—Speakers at Burnham-Moores' 15th-annual residential eal estate conference Thursday said a confluence of factors is preventing median-priced homes from being built here and creating a supply-and-demand situation that is driving up prices to unsustainable levels. The panel, in addition to keynote speaker Norm Miller, Ernest W. Hahn Chair of real estate finance at Burnham-Moores Center for Real Estate at the University of San Diego, said San Diego is in a crisis mode as far as having enough housing units available to meet our needs now and in the future; homes are not affordable to the middle class; there are not enough for-sale single-family homes in our inventory; and all of this may negatively impact San Diego's economy.

Miller said the housing sector is doing great thanks to low unemployment, and he doesn't expect another recession to hit until 2019. He cited stats from CoreLogic that forecasted interest rates rising 1% in the short term and .5% in the long term and housing prices to rise 4% to 5% during 2016. Household formations was up in 2015 by 1.7 million units, but the average age to buy has risen to 31, due in part to large amounts of college debt stemming affordability. As much as 20% of income is used to pay the student debt of 40% of young borrowers, and the homeownership rate is under 64%, heading down to 62% before bottoming out, he said. The forecast for San Diego is a 7% increase in home prices for 2016.

A national lack of housing supply since 2012 has been helping to drive up prices, with next to no inventory under $600,000. Many homeowners still have negative equity and credit issues leftover from the recession, said Miller. The worst foreclosure states are Nevada, Arizona and Florida, with California a little under the national average. Still, foreclosures are coming down, REOs are in the normal range and underwriting remains cautious. However, NIMBY-ism is a big factor deterring development.