San Diego Housing Bubble News and Analysis

Rents are headed down.

Enjoy!

Rent is very seasonal based on my observation for the last 5 years. The differences can be as much as 20% between winter and summer (starting around May - August). So, if you're flexible, I'd say move now instead of June. Example, rent of a 2/2 in Mira Mesa was ~900 in 1996. They're around 1450 today. That gives you a little over 3% a years appreciation. That's right in line w/ reported inflation numbers. So, I don't see rent of a 2/2 in a bubble environment. At least in Mira Mesa and UTC.

I just rented a tri-level townhouse in Bay Ho. It is a 2/2 w/a 2 car garage, over 1000 sf and a distant panoramic ocean view for 1800.

I just moved from the 2 story townhouse I was renting in UTC, which was also a 2/2 w/a 2 car garage for 1700.

Though I'm paying 100 more a month, the hot water is included and I'm in a much nicer place.

They originally wanted 1900. It had been for rent empty for over a month. They agreed to lower it.

"Rent is very seasonal based on my observation for the last 5 years. The differences can be as much as 20% between winter and summer"

I call BS on this one - 20% difference???

Not in any of my bread-and-butter rentals or any of the comps that I followed in order to set my rental rates - perhaps you are referring to higher end rentals like above $2500/mo?

What does happen in the winter is that it becomes harder to rent a vacant unit so landlords become more flexible - having a vacancy in Nov, Dec, Jan really sucks because very few people are looking to move in that timeframe

But to drop a $1200 rent to $960, or a $1800 rent to $1440 - no, I don't think so

Face it, vacancies are increasing and rents are declining

I've seen some winter rental deals because it is a tough time to have a vacancy. And there's more flexibility from the LL. But as unemployment creeps towards 9% in CA, rents will have to be coming down in many areas.

Spring 2008, when I rented my 2/2 apartment in Mira Mesa, rent were around 1350-1400. Summer (June-August) 2008, they all shot up to 1600-1650. I'm talking about craigslist with private owners. If you're talking about apartment, the price per month is not as noticeable, but you can easily get one month free in the winter time vs summer. Price is also easier to negotiate during the winter too. Call BS all you want but that was my experience last year and the year before when I was looking for rent in Mira Mesa. I keep an eye on rent all year, just so I know when I should move. 20% is extreme but 15% is quite normal in my experience. Maybe these landlords are not as experienced as you are.

My lease expires next month and I've been looking. Since I have a 12-month lease, I was looking at this time last year too.

I did notice that last summer rents were higher than when I renewed in February. Thus, this does seem to be a seasonably soft time of year. However, there seem to be a lot more vacancies now than there were last year at this time and rents are definitely cheaper. My guesstimate is that rents are off between 5% and 10% as compared to this time last year.

It's hard to say if this trend will continue into the summer. The recession/depression may overwhelm the seasonality and rents could continue to go down from here. I'd like to see that happen, but I'm not holding my breath.

TheBreeze, I concur w/ the 5-10% drop assessment. I wouldn't be surprise if this summer, you'll see 5-10% drop compare to last summer too. Since you also saw rent being higher in the summer, Winter 2009 would be an even better time to find a rental. Wouldn't that mean it's still better to move now and move again next January, when rent would be cheaper than Summer 09?

Yeah, that seems like a reasonable plan. If rent is cheaper this summer than now, it is likely to be cheaper still in the following winter. Plus, setting yourself up to renew every winter (especially if one plans to rent for several years) is likely to save money in the long run as opposed to having to renew during the summer.

I checked out two complexes this morning and got wheeled and dealed by the apartment leasing office. They advertise a low price on the internet, then they do either one of two things.

1) Say that unit with the deal has been rented but we have units just like it for 150 a month more

2) Say that the rent is XXXX, but since that unit has a washer/dryer and A/C, they add 150 to the rent a month (despite the fact that every unit has a washer/dryer and A/C).

I'd really love a little truth in advertising here because I'm tired of wasting my time being dragged to these places.

I don't make a fortune by any means, but definitely above the median income for San Diego. When I look at these apartments it just boggles my mind how these not even that nice complexes are filled up all with people paying ~1600 a month in rent. Are people really paying 50% of their income?