One of the nation’s tightest rental markets

[bewildering]

http://www.utsandiego.com/news/2015/apr/24/rent-apartments-cost-of-living-sunshine-tax-lease/

$2000 for a studio?! “Only” $1600 for a studio in a different place?!

In 2005 I rented a 1bdr in PB 6 blocks from the beach for $950. My landlord did not raise my rent for the 5 years I lived there. I wonder what it rents for now?

My clairemont 2/1 sfr rental was $1650 from 2012-14. The landlord rented it out to the next tenants for $1750. He had 30+ people contact him within 60 minutes of the place going on craigslist. A similar rental is on craigslist for $1950.

The rental market is driving house prices. How can there be any reduction in prices when the rental vs. house payment is at parity? All I can see is house prices going up and up.

[joec]

I just posted about this article as well on another thread and agree. I don’t think house prices will go down until rents go down. Unlike stocks, you have to have a place to live. Developers are also not overbuilding and instead, building things that will sell and no low cost units.

As mentioned, even if “you” leave and don’t want to rent and are fed up, there seems to be an insane amount of people who are glad to rent it. I just checked my hood and rents are now up like 200/month from when I last checked like 6 months ago (4S house area).

Glad I don’t have to worry about this stuff currently and one positive of owning vs. renting. Up/down, whatever…my payment is the same.

[spdrun]

You can still find studios in PB for under $1000/mo. I know someone who rented one for $975/mo starting in February of this year.

I’ve been looking (have a unit to rent now) and rents on existing units aren’t up much over last year. I think that a lot of high-rent NEW units are being built, but that’s a tiny % of the market.

Also, any rent increases that have occurred don’t justify the city-wide run-up in prices since 2012. The multipliers don’t exactly add up 🙂

$1600-2000 for a studio isn’t the norm, other than maybe in the “East Village” where hipster suckers with more money than brains go looking for a hopping urban environment and find overpriced boredom.

[Coronita]

So what is the relationship between home prices and rent prices?
I’m not quite sure. To me it seems like rent prices are driven by demand, and the reason for lots of renters in SD is because affordability and qualifying is difficult, where the latter is more of an issue, with tight lending standards. Thoughts?

Using my favorite benchmark (Mira Mesa), a 1/1 still probably can be rented for about $1350/month, that’s not a terrible increase from 3 years ago when they were around $1200/month. But for the same condo that sold for around $130k, they are pushing close to $200k now. So it seems like while rent has gone up, the rate of rent increase isn’t close to price increase in resale. (damn I wish I bought more).

[fun4vnay2]

I have been tracking rent in mira mesa for last 10 years and I can say that in the last 10 years the rent increased max by 15% or even less.

Also I wanted to buy a condo there to rent out but no way I can be cash positive With current evaluations..
same thing for sfr..

[paramount]

Don’t forget as home values rise, so will taxes (and escrows) and to an extent rents will follow.

[spdrun]

Not necessarily — it could just throw the buy:rent ratio out of kilter, limiting further rises in prices since renting would be more economical.

[an]

[quote=rockingtime]I have been tracking rent in mira mesa for last 10 years and I can say that in the last 10 years the rent increased max by 15% or even less.

Also I wanted to buy a condo there to rent out but no way I can be cash positive With current evaluations..
same thing for sfr..[/quote]I agree, rent in MM for both 1/1 and 2/2 have gone up ~15-20% over the last decade. For small SFR, rent have gone up about 20-25%, while rent of larger homes in MM have gone up the least at around 10%.

[utcsox]

Zillow published monthly rental market overview here: http://files.zillowstatic.com/research/public/rental/ZRI.San%20Diego.395056.pdf

In San Diego region, annual change in rent is 5.1%. Areas that are desirable and closed to the job center are increased faster than the city as a whole.

I was helping one of my coworkers to look for a place. Costa Verde, located in UTC, which is sort of an extension of UCSD dorm was charging ~$1500 for a 2-bedroom unit back in 2005. Here is their latest ad on the craigslist for a 2-bedroom unit:

http://sandiego.craigslist.org/csd/apa/4995738301.html

This is close to ~40% rent increases for the past decade. I highly doubt that the rents for apartment units in Mira Mesa only increase for ~10% for the past decade. If you believe Zillow’s number, the rents in Mira Mesa increase over 6% for the last 12-month!

[fun4vnay2]

The apartments available in 2006 for 1400/month is now available for 1650/month now.
This is true broadly for a 2BR/2bath in MM.

[NotCranky]

Can’t feel the least bit sorry for the guy who makes 3,400 a month and spends , what was it, 1700 a month before utilities, on rent of a little box.

Then he says the property managers have all the leverage. No, the zip code does. I always had roommates , even for the first 8 years that I owned houses.

[spdrun]

He’s also overpaying for the ZIP code — he should be able to rent 400 sf in PB for well under $1500/mo.

[NotCranky]

[quote=spdrun]He’s also overpaying for the ZIP code — he should be able to rent 400 sf in PB for well under $1500/mo.[/quote]

That’s still crazy for what he earns. How is he ever going to get ahead?

[spdrun]

I guess it’s the price of not living in a festering shithole (read: any neighborhood where you can’t walk). The answer is: be cheap in other ways. Cook at home, drive an old car, etc.

[NotCranky]

[quote=spdrun]I guess it’s the price of not living in a festering shithole (read: any neighborhood where you can’t walk). The answer is: be cheap in other ways. Cook at home, drive an old car, etc.[/quote]
You’re right.

[Author]

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