Ever since the housing market crash, rent prices have been increasing. With mortgages harder to get and the slowdown of building, more people opted to rent than normally. This drove up demand and increased scarcity, both ultimately increased the cost of rent nationwide. Rent has been skyrocketing in San Diego especially, with the San Diego Tribune reporting that September hitting a record high of $1,875 and continuing to grow. With rent so high and the housing market stabilizing, it’s time to consider buying a home in San Diego.
Skyrocketing Rents Across The City
Since even before the housing market crisis, rents have been increasing in San Diego. As an incredibly desirable city, with lots of growth and opportunities, rent has been steadily on the incline since 1988. However, the last two years have seen a dramatic jump in prices at 8.4% in 2016 and 7.59% in 2017. This jump has outpaced the price of homes and income rates in the area, meaning that it is essentially cheaper to own a home in San Diego, than to rent one.
Why Are Rent Prices So High This Year?
There are several factors to why rents are on the increase in San Diego. The biggest one is that apartment construction has slowed. There is some development, but for the most part, that development is focused on high-value, luxury condos, townhomes, and apartments. This new construction has not addressed the demand but has instead further driven the increased costs of rent across the city. The lack of development has lead to extremely low vacancy rates, with only 2.73% of all the apartments in the city available in September. Low vacancy means that rental properties can charge a premium because of the scarcity of apartments.
Housing Prices Are Up, But Still Less Than Apartments
The housing market in San Diego has had an incredible year. Housing prices are up because of demand and buyer confidence has finally returned after the crash. However, even with home values increasing, the cost of the average mortgage is now less than the cost of rent. So for residents across San Diego, it’s a great time to consider buying a home. Especially if expert projections about rent increases over the next few years are correct. San Diego has one of the highest costs of rents in the United States right now, but mortgages are pretty average for comparably sized cities.
Now May Be The Right Time To Buy A House
With rent hitting record-breaking highs and projected to increase, the cost of a mortgage seems more reasonable. Especially when considering you get a lot more space for your budget with a home. A two-bedroom apartment costs an average of $2,300 dollars this month, which is more than an average mortgage on a two-bedroom home in the city. So if you are looking to move in the next few months, it would be smart to consider investing in a home rather than paying for the more expensive rental costs.