Rents appear to be mooning

[gzz]

I used zillow’s draw feature to create a zone that was a box with the 8, 56,and 15, then added in Del Mar, Point Lomam, OB, Hillcrest, Mission Hills Downtown and the the western parts of Golden Hill and Northpark.

In this box there are 166 rent listings for 2/2s. Of these 166, the only ones below 2k were $1945, $1950, and $1995. Further investigation shows two of these are fake listings and the third isn’t open until Sept 15.

The cheapest listing for right now is $2200. And of the ~160 listings, only 36 are below $2800.

I think some landlords are holding back because of the eviction pause that is about to end. But gains like this support recent RE price gains.

Here’s an archive.org check. La Jolla Palms website now says starting at $2865. In Sept 2020, they said starting at $2175, up 32% in 10 months.

[pokepud3]

Yes rents have gone up but not as much as you think historically at least in the UCSD area. La Jolla/UTC last year took a massive hit when UCSD basically closed up in campus classes and the majority of the kids stayed at home to do their classes remotely.

My 2/2 on Gilman Dr, went from $2400 which was the avg rent in 2018/19 to $2150 just so it would get rented out. This year tenants moved out and it went for $2800 easily. Some were going for $2900 and probably got what they asked for. In reality though it’s only up maybe.. 3-4% per year which is avg for San Diego. This is only for utc/UCSD area.

With all that said, rent throughout is definitely going up and I assume thats due to the much higher selling prices homes are now commending. Got to make those up somehow..

[gzz]

2400 to 2800 in two years is 8.3% per year and to $2900 is 10.4% a year.

Not bad!

5k more undergrads must mean a lot more staff and faculty too. The new trolley line however will let them live off campus more easily. It seems to be a rare government project with fast paced construction.

[gzz]

Kinda dumpy Oceanside complex sells for 74.1M, prior sale was 3/2019 for 57.1M.

https://www.globest.com/2021/08/02/oceansides-the-dylan-apartments-trades-for-74m/

30% gain in about 2.25 years.

I think the new owner will be pleased with the return on investment.

[Coronita]

[quote=gzz]Kinda dumpy Oceanside complex sells for 74.1M, prior sale was 3/2019 for 57.1M.

https://www.globest.com/2021/08/02/oceansides-the-dylan-apartments-trades-for-74m/

30% gain in about 2.25 years.

I think the new owner will be pleased with the return on investment.[/quote]

So is this inflation?

[gzz]

Huge project opening downtown:

https://www.sandiegouniontribune.com/business/real-estate/story/2021-07-22/downtown-san-diego-now-has-room-for-more-than-600-residents

I lived in a great Bosa building (Discovery Cortez Hill) my first few months in San Diego.

[gzz]

La Jolla Palms now starts at $3240. Up 50% in 19 months.

Zillow’s rent estimates is broken because it can’t keep up.

Tenants getting mere 20% rent increases should be sending gift baskets and hand-written thank u notes.

[Coronita]

[quote=gzz]La Jolla Palms now starts at $3240. Up 50% in 19 months.

Zillow’s rent estimates is broken because it can’t keep up.

Tenants getting mere 20% rent increases should be sending gift baskets and hand-written thank u notes.[/quote]

Rent for 1/1 in Mira Mesa is like $2000/month now.

Rent has gone up significantly now, specifically near UTC/La Jolla…because school is now back in person and not remote….
So last year, students could have remained at their parents house taking classes online. This year, many local schools are back in person, so they can’t stay at their parents house and need to rent here.

A relative that rents a 2/2 in UTC that is slightly upscale rents it for $3500/month.

This is what is so funny. DZ thinks that now that people need to return back to office is a bad thing for housing prices…but the irony is that students returning back to campus is definitely bad for rent prices and especially on the UTC area….ouch…lol.

[gzz]

Interestingly, the La Jolla premium over other central coastal areas for SFH rentals seems to be going down.

Looking at rent v buy, buying a 1.5m-ish house still seems to be the better option. Not the slam dunk of prior years, but still better.

[limkotir]

[quote=gzz]Interestingly, the La Jolla premium over other central coastal areas for SFH rentals seems to be going down.

Looking at rent v buy, buying a 1.5m-ish house still seems to be the better option. Not the slam dunk of prior years, but still better.[/quote]

What are the numbers and assumptions behind your claim buying is still better, curious to hear about it, if you don’t mind giving the reader’s digest / TLDR version.

[gzz]

Lim: I subtract out from the potential mortgage payment the tax benefit of owning + the part of the monthly payment that pays down principal.

I am also assuming a refi at some point, and rent going up.

Putting these together, it is still a little cheaper to buy.

I am still early in the process. My parents might move in with me to a granny flat and provide childcare part time for my new baby. That increases my price range but also requires something larger.

I’d probably sell my house if there were no capital gains taxes and I could replicate my prop 13 valuation and 2.3% 15-year mortgage elsewhere. Since I am “stuck” owning it would become a rental.

[sdrealtor]

So where are you looking? Just curious even though I kind a know where you’ll probably end up

[gzz]

Greater Clairemont, PL, UC, northeast PB / mt soledad area.

Not sure I could live that far away, but possibly areas further east between the 8 and 52 like San Carlos and Tierrasanta.

[Author]

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