[quote=sdrealtor]DLJ
A question about your math. How did you come up with the 23% figure?
When I see rents increasing 3.1% nationally vs. 4.5% in SD, that translates to increases that are 45% higher here than the country as a whole.
4.5-3.1 = 1.4
1.4/3.1=45%
Am I missing somethng here?[/quote]
Yes, your math, while intuitive, is incorrect.
Measuring outperformance of 1.4% annually over 15 years would be 1.014^15 – 1 = 23.2%. Or, likewise, you could start with an index value of 100 and compound at 4.5% annually for 15 years and get to 193.5 (for San Diego) and then by 3.1% (for the US) to get a value of 157.08, and 193.5/157.08 – 1 = 23.2%.
