The Union-Tribune ran an article today on population outmigration. Timely as ever – NOT!!! We’ve been talking about net outmigration for a while now. The article focuses on home owners and equity flight, but kinda shortsheets the rental market. There is more vacancy in the apartment markets right now than in years past, and I’m sure that some of those renters are getting priced out of town, too.
Think about it. If you’re a renter with no family ties to SD, what incentive do you have to pay 50% of your net income for apartment rent? Especially if your annual income level is in the sub-$40,000 range, which is where most apartment tenants come in.
Here’s an interesting little factoid: if you compare the average wage structure for most occupations between SD County and Riverside County, you’ll see little or no difference in many of them; yet the price of rental housing is at least 20% less when comparing otherwise similar apartments (and homes, too). By getting a job in Riverside County and moving there, an apartment tenant can effectively get a nice raise. And that effective increase in net income isn’t taxable. Such a deal.
That wage/rent comparison is even more pronounced in other states. Unlike here, a skilled worker can realistically aspire to owning their own home – and keeping it – in other areas of the nation.
San Diego wages are not higher to offset for the increased cost of living. The U-T ran an article about this a few years ago, calling it the “Sunshine Factor”. Most people here earn less, but pay more for the priviledge of the weather. They gave examples of wages for plumbers, engineers, and I was surprised that you really do earn more in other states. I can’t remember the details.
Before we moved here from Phoenix, I did a superficial study of wages in San Diego, comparing government jobs in both cities. Surprisingly, they were about the same, although at that time the cost of housing was double in San Diego. But wages had not increased to keep pace with that. At that time, and until a few months ago, I though everyone around me was rich, to be able to buy those expensive homes plus new cars plus vacations plus remodels plus send their kids to too many activities. Now I realize they were all getting low interest loans.
Has anyone noticed in the last few months, so many Hiring signs at retailers? Almost every store I go to, whether grocery, furniture, cell phone, is hiring. This couldn’t be due to any economic recovery, but is probably related to the exodus of people leaving San Diego, leaving their jobs behind. Jobs are harder to fill, as we can’t get people to move her to fill them.
The San Diego Housing Commission states in a fact list that the median household income in SD County is $64K, far short of being able to purchase the median priced home. I remember once reading that a family needs to make $22/hr to afford to live here modestly, in an apartment. Although you make a decent wage, it’s hard to afford living here. You make more than I made after college in my first software job.
Per capita income for San Diego (city) was $35,600 in 2003.
We have the same problem with getting ahead. Too much of our income goes to housing. The only way to get ahead financially is spending less than you earn. The major impediment to that is the high cost of housing.
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