Rent are rising

[The-Shoveler]

That will not solve the shortage.

[FlyerInHi]

I keep on hearing warnings of runaway inflation. So wouldn’t the problem fix itself?

Looser building permits and zoning, and more construction are the solutions really.

[The-Shoveler]

That is the dichotomy of the Fed LOL

They want wage growth, but they don’t want enough wage growth. LOL

they should just come out and say, we want everyone to make 20% more money so they can pay their existing debts.

But that would be too obvious LOL,

[utcsox]

“… ith rents rising at annual rates of between 3 percent and 6 percent — roughly double the 2 percent pace of average wage growth.

Still, the outlook isn’t necessarily dire for the average family. Rent consumes less than half of a typical household’s income, and San Diego’s overall inflation rate was low at 1.3 percent in the second half of last year. So rents would have to keep rising faster than wages for years to cut into disposable income.”

If the rent is increasing at the rate twice as fast as the average wage growth and rent is a significant part of household’s budget, how in the world this has not already cut into disposable income of average household?How in the world the situation is not dire?

[livinincali]

[quote=utcsox]
If the rent is increasing at the rate twice as fast as the average wage growth and rent is a significant part of household’s budget, how in the world this has not already cut into disposable income of average household?How in the world the situation is not dire?[/quote]

It will resolve itself one way or another. Either rents will stop rising at a faster rate or wages will catch up. Two exponential curves run away from each other pretty fast so it won’t stay this way for long.

[an]

[quote=livinincali][quote=utcsox]
If the rent is increasing at the rate twice as fast as the average wage growth and rent is a significant part of household’s budget, how in the world this has not already cut into disposable income of average household?How in the world the situation is not dire?[/quote]

It will resolve itself one way or another. Either rents will stop rising at a faster rate or wages will catch up. Two exponential curves run away from each other pretty fast so it won’t stay this way for long.[/quote]Agree. Up until now, there have been a lot of slack in the labor force, which allow companies to keep wages down. However, through birth and migration, the demand keep on increasing why supply isn’t keeping up, which is what’s cause the rent to go up. Simple supply and demand. Sooner or later, either people will be fed up and leave, which would cause a decrease in demand, which would then drive down price or at least keep price stable. Or, companies will grow and increase income. We’ll see soon enough.

[FlyerInHi]

AN and livin, you guys are correct in that there will be an adjustment.

But consider that the ratio of housing cost to income in San Diego has been increasing as compared to the rest of the country. In that way, it will never return to “the norm” in our lifetimes.

Certain glamour/rising/desirable cities do cost more over time.

[joec]

Another thing people are doing are moving in with each other or living with parents for a bit longer…Know some folks in my kids school doing this (stay with parents mostly to get the good area schools).

People think using half income on rent is normal because for places like here and LA and Bay area, that seems to be the norm now. Rent is just too high so unless your income or IPO riches will get you there, I’d suggest most people leave.

If it was me and I had to do it all over again, I’d probably just have roommates assuming I was young (20s). Heck, I did have room mates for a long while when I started work. When you have, say a room in a house in a nice area, each person can split say 4 rooms at 1k/month and that’s not really that bad…Better yet to just “live” at work and not even pay (or live in a camper in the parking lot).

So glad I don’t have to worry about rent going up or down!

[fun4vnay2]

Yeah, a lot of people are telling me it’d never return to ‘norm’ in san diego.
Buy now lest you are priced out 4ever.

Wait, I think I heard it sometime/somewhere b4 as well 🙂

Only time would tell

[an]

[quote=FlyerInHi]AN and livin, you guys are correct in that there will be an adjustment.

But consider that the ratio of housing cost to income in San Diego has been increasing as compared to the rest of the country. In that way, it will never return to “the norm” in our lifetimes.

Certain glamour/rising/desirable cities do cost more over time.[/quote]What’s normal changes. I don’t expect us to ever be back to SD of the 70s anymore. When compare to many other places around the world, I feel like SD is still quite cheap relative to income.

[The-Shoveler]

[quote=AN][quote=FlyerInHi]AN and livin, you guys are correct in that there will be an adjustment.

But consider that the ratio of housing cost to income in San Diego has been increasing as compared to the rest of the country. In that way, it will never return to “the norm” in our lifetimes.

Certain glamour/rising/desirable cities do cost more over time.[/quote]What’s normal changes. I don’t expect us to ever be back to SD of the 70s anymore. When compare to many other places around the world, I feel like SD is still quite cheap relative to income.[/quote]

That’s the thing I think is hardest to understand or except for most SoCal natives,

SoCal is becoming more and more an international housing market, and in that market, we are in the bargain ben.

[spdrun]

Which is why a collapse in China or a Grexit would be a good thing for “normal” people in the US — they would slow things down a bit.

[FlyerInHi]

[quote=AN] What’s normal changes. I don’t expect us to ever be back to SD of the 70s anymore. When compare to many other places around the world, I feel like SD is still quite cheap relative to income.[/quote]

Yeah, that’s precisely it.

I remember buying buy my first house in San Diego when I was 20yo in San Diego, in the late 80s. I paid about $130,000. Back then, San Diego was only about 1.5x the average house in America (say compared to TX).

Now, San Diego is multiples time more. And compared to SF and NYC, there’s room to grow.

If you look worldwide, San Diego is a second tier or third tier city. Other cities around the world have appreciated at lot more in the last 30 years, even in emerging economies where incomes are low compared to house prices.

At what price will people get fed up and leave San Diego? I think that there’s still a lot of tolerance left.

[spdrun]

And that’s a good thing that it’s not a first-tier city — being a first-tier city would destroy a lot of the charm. Also, San Diego isn’t as limited geographically as the expensive parts of NYC and SF.

[an]

[quote=spdrun]And that’s a good thing that it’s not a first-tier city — being a first-tier city would destroy a lot of the charm. Also, San Diego isn’t as limited geographically as the expensive parts of NYC and SF.[/quote]
You’re wrong there. SD is essentially built out.

[Author]

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