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I’ve been doing some reading and making some calls today about rents in San Diego — how they’re changing or not changing in relation to the for-sale side of the local housing market.
I’ve been hearing a few trends from renters, from individual landlords and from some investors in apartment buildings — namely, that rents have not nearly kept pace with price appreciation for purchasing homes and multiple-unit buildings.
Renters, obviously, cheer over that. But the easy borrowing of the last several years meant that many homeowners in the county started dabbling in real estate investing for cash flow. Now, a lot of them are underwater because their payments have risen, while rents haven’t — at least, not much. (Some in North County tried to close the gap while the wildfires raged, remember?)
Our ‘honor’ poster from a few weeks ago commented to that effect:
We would be hard-pressed to sell it for what we owe the bank, and rents from the three units fall slightly short of covering mortgage/tax — and way short of covering all the other expenses involved in a rental property.
I’ve found a few interesting bits in my research today. Here’s a recent discussion thread on Piggington about rental prices, with a few clicks to some rent-tracking sites, like Zilpy. Here’s a Zilpy search result for San Diego. That site is pretty number-filled — I haven’t found out yet how it tracks the prices, but it has breakdowns for various neighborhoods around the county.
I also found this post from Calculated Risk. It’s a transcript from a conference call with some officials at BRE Properties, a real estate investing company. The transcript says there’s a difference between coastal California and places like the Inland Empire and Phoenix, where it sounds like apartment renters are moving out not to buy homes themselves, but to keep renting — though they’re looking for a single-family detached home instead of an apartment.
Whichever side of the rental market you fall in, please chime in here. Renters, what are you seeing/hoping for? And you with second homes or extra properties you’re trying to rent — I’d love to know what trends you’ve noticed lately. Click my name below to send me an e-mail.