19 Jan Price increases of rentals in San Diego may push more to become homeowners
Don’t expect the price of rentals in San Diego to come down anytime soon.
San Diegans spent $9.4 billion on rent last year — a 3 percent increase from 2014, according to a study by Zillow. Residents forked over a pretty penny, but they did not spend the most: New York residents paid $55.9 billion; Los Angeles, $34.5 billion and San Francisco, $16.7 billion. Cincinnati spent the least at $2.3 billion.
The move could push more to become homeowners.
More homeowners in San Diego?
Historically, rentals in San Diego are among the highest in the nation and San Diego real estate analysts don’t see that changing anytime soon. They project rentals will be 5 percent higher in 2016 — a trend that could push more on-the edge renters into home ownership. The area has struggled with housing supply and many property owners will ask — and get — more in a market with fewer rentals amid more homes for sale in San Diego.
That has caused more residents to own instead of rent, especially with the low interest rates in much of 2015.
Still, rentals remain a hot button issue. Rental rates in the San Diego real estate market have averaged a 4.1 percent increase since 2010, with rates at that time at $7.6 billion. Rentals are increasing at the same time as home values are on the rise. Zillow found home values increased 5.1 percent in 2014 and 14.2 percent in 2014, respectively. Affordability remains an issue. An estimated 55 percent of San Diego renters spend a third or more of their income on rent, according to a study in 2015 by Apartment List.
That study, based on 2014 data, found San Diego was the 18th highest rental market in the country when compared to all 50 states.