I have been following the ups and (not so impressive) downs in the SD market since Spring 2004. Though prices of condos have been coming down, I am going to wait longer until I finally buy one (I would like to live downtown). In the meantime, how about renting a condo downtown? I just heard a report on the news that condo rental prices should also be taking a few steps back because owners are having a hard time selling, and there are too many conversions on the market. According to the San Diego Housing Commission website, the majority of the condos being built downtown are of the “luxury” variety averaging $1600 per month to rent. I am single, and probably looking to start off in a loft. I am comfortable, at my income, with $1200-ish for housing costs (won’t have to choose food vs. bills), but I could go higher for the right place. Should I expect to see some deals popping up downtown to get that price a little lower or is it justified? Do I have some room to be a little more aggressive in price negotiations?
I don’t have any hard data, but from what I can gather rents are still reasonable, but they are on the rise. I would recommend renting and trying to lock in on a favorable lease for at least a year, maybe two. This is considering you are not ready to purchase in that time. Based on what I’ve been reading, it may be wise to establish a possible 2-3 year plan for renting and go into a savings mode to prepare for the time when buying conditions are more favorable.
With all the condo reconversions, and glut of downtown condos, it seems that rental prices will go down, rather than up, for condos at least. For SFH, the market seems tight, and is more likely to go up in the near term. Also consider that people are moving out of SD, and not many people can afford $1500 or more rent.
OTOH, I am reading that rents are going up. I think that trend will reverse when the thousands of apartments that were taken off the market to be converted for condos, will come back on the market as apartments. Couple that with fewer tenants as people move out of San Diego, and you get lower rents. My guess is that by this fall, you have a good chance of having a bank or developer as a landlord for a downtown condo. They’ll have trouble selling these units. These are just my thoughts, I could be wrong.
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