07 Jul Rents in San Diego on the rise, pushing renters to become homeowners

Rents are rising in San Diego. The San Diego County Apartment Association found the average rent in the county was $1,514 a month, according to a survey in April. That’s up 20 percent from last year.

And while the rising rents might be good for landlords, it is putting a pinch on local renters’ wages – driving up rents in San Diego faster than employers are boosting paychecks. Wages in San Diego are growing at an average of between 3 percent and 6 percent annually, and employers in the county have added nearly 50,000 jobs in fields such as biotech, engineering and professional services.

San Diego real estate market gets a boost?

But job growth hasn’t outpaced rents, even with a median income in San Diego that is higher than many metropolitan areas. It’s not unheard of for new studio apartments in San Diego to cost $2,000 a month. The rising rents could boost the San Diego real estate market,  pushing renters to become homeowners after they consider how much they’re paying in rent each month, especially with the area’s lack of affordable housing.

Comparatively, home prices rose 4.6 percent last year and a median-priced home of $455,000 in San Diego is estimated to cost $2,230 a month with taxes and insurance.

And rents are predicted to keep rising. Commercial real estate firm CBRE found the average rental in San Diego County is $1,756 a month — and it projects rents to rise by 3 percent a year over the next 3 years, and is predicted to average $2,040 a month by 2020. Nationally, rents are also climbing. Real estate data firm Zillow found rents nationally climbed a seasonally adjusted 4.3 percent in May from a year ago, with rents in cities such as Denver, San Francisco and San Jose rising double-digits.