San Diego Renters and Thier Benefactors
The cost of renting in San Diego has now become a personal trap of preventing instead of facilitating future homeownership. For a majority of people, renting used be a temporary condition where future homeowners would save up down payments to purchase their own homes.
Not so much now with rents far exceeding the typical monthly cost of homeownership. There is little opportunity to save for their own future home purchase. This also presents a conundrum of sorts for future growth and stability of the communities that make up San Diego.
Here we have some of the lowest interest rates in over a decade and so many would be first-time Buyers are now caught in the position of living pay check to pay check with little ability to save for a down payment. As real estate professionals, we know all too well that when the first levels of homeownership become stagnant or immobile, that it affects negatively on those that would like to be move up buyers.
We have also seen where this condition ultimately has a negative effect on home values. Just the opposite is happening today with home values continually increasing because available housing supply has been greatly diminished and builders can not afford to provide the affordable housing so much needed today to fill the need. Land costs and building fees keep going up in direct relationship to the increasing home values caused by an unbalanced supply and demand.
While there are certainly lots of winners in the above scenario, most renters, and future homeowners are not among them. Their benefactor landlords are doing quite well, however. Fewer homes available to buy means more will be trapped the rent cycle in the years to come. And the ultimate issue is fast becoming that affordable rents have all but disappeared and more and more financial resources are required just to afford basic housing.
I wish I had an answer but the situation seems to have a life all of its own.
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