What’s The San Diego Rental Market Like?
Welcome to California. Does that answer your question? The San Diego rental market is challenging. But it’s not that bad. We recently posted an article on tips to find a San Francisco apartment, and San Diego isn’t nearly as challenging as the Bay Area. But there are some things you should know, including whether or not you really want to rent here.
The Economy And The Average Rent
The economy is finally improving noticeably. We’re starting to get beyond the “jobless recovery” stage and into the “actual recovery you can feel in your own life” stage. That’s good news for people and for your wallet, but it’s expensive news for the housing market in San Diego. The average rent is $1,575, and that’s up almost ten percent from last year. But it’s half what you’d pay in some other cities in California, so consider yourself lucky.
Renting Vs. Buying In San Diego
At $1,575, you’re right on the edge of renting versus buying. It comes down to how long you intend to stay. If you’re looking for a home for the next 5-10 years, you might want to buy – chances are strong that prices will appreciate enough even in the five year term to be worthwhile, with the current state of the economy. If you’re looking for less than that, or if it’s possible you might have a lifestyle change in that period, you may want to stick with renting.
Being part of the San Diego rental market comes with another advantage. Maintenance is not your problem. New homes are being built in the area, to be sure, but they’re generally on the high side of the market. If you’re not looking to spend as much money as humanly possible – and most people aren’t – you’re likely to be looking at an older home. If you rent instead, you don’t have to worry when things go wrong – that’s on the landlord to fix.
It’s also worth noting that one quarter of home purchases in San Diego county are cash buyers. That increases the competition for those homes. Let’s face it, no seller is going to reject a slightly lower cash offer in favor of an offer with a financing contingency and less than perfect odds of the deal actually closing. When you have a significant number of cash buyers in an expensive market where mortgages companies are tougher than ever in their underwriting process, it makes finding a home even more difficult for those who need financing and tends to encourage renting.
Apartment Age In San Diego
One of the problems with the rental market in San Diego is that the average age of an apartment community is roughly 40 years old. New Class B apartments – fairly recent construction, adequate amenities, and no deferred maintenance issues – just aren’t being built in the area and haven’t been in some time. That very much limits the availability of apartments for people who aren’t looking for a $5,000 a month luxury apartment, but who expect a certain level of quality.
One of the reasons for this is that zoning for apartments just hasn’t kept up with the needs of the population. Alan Nevin of Xpera Group gives the sample that “two cars per unit doesn’t make sense today,” and that those two parking spots take up more real estate than a studio apartment would. This is a problem that’s likely to only get worse over time, since land is functionally limited in the area. You can build higher, but people who are building higher are building more expensive luxury apartments aimed at the very upper end of the market.
Population And Its Impact On The Rental Market
San Diego has added a large number of jobs in recent years, many in high paying fields. The population increase that comes with the increased jobs has led to an increase in rent. It’s also led to a reduction in the number of units available at any given time, and higher competition for those rental housing units. San Diego is the fastest growing city in California, which doesn’t help that competition.
HOAs Aren’t Just Annoying
Sure, when your neighbor paints his house bright purple, you have someone to call. But what happens when they don’t like the length of your grass? Nobody actually likes having an HOA when they’re subject to it, but they do tend to increase property values as well as keep the neighborhood at a certain level. But the costs of those HOAs are rising rapidly. In many cases, buying a home in San Diego becomes drastically more expensive when you factor in those association fees.
Insuring Your Home
Is there cheap renters insurance in San Diego? Well, relative to the cost of homeowners insurance, there certainly is. A homeowners policy might run you $1,500 a year, while a San Diego Renters Insurance might cost you less than $200 a year. The money saved basically pays for a month’s rent in an average apartment. There are a number of other factors to consider, of course, but renting still is the better option for many people in San Diego.
Whether you rent in San Diego or buy a home, you’ll need to insure it. That requirement is standard at nearly every apartment in the county. If you need to get covered, just reach out to the insurance experts for California renters at (800)892-4308 or click to get covered - whether you need San Diego renters insurance quotes online or coverage anywhere else!
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Photo Credit: peasap San-Diego-HDR CC BY 2.0