San Diego's Growing Housing Affordability Crisis
The cost of housing in San Diego is growing and more and more working families are facing difficult times in both acquiring a home or meeting the challenge of the costs of renting. The national average home price is in the $190,000's. In San Diego that average is more than two and half times that amount at $535,000. San Diego's average rent for a 2 Bedroom is now at $1700 per month. And for those with a bigger family, the average 3 Bedroom rental is over $2100.
Think back to when your parents bought their first home and try to imagine them paying over a half million dollars for their first little piece of the American Dream. Chances are that their incomes have not risen 10 to 12 times what they were earning then over the same course of years.
We are seeing in so many parts of San Diego that the cost of housing is now exceeding 50% of income. The only saving grace is that the rising tide of housing prices is floating all boats (equity that is creating wealth).
So in effect, while the housing affordability crisis is real for so many, for those fortunate to already be in the home ownership minority and as long as the economy stays stable and jobs are still being created, they are likely creating some good equity. God forbid that a crsis or serious recession be on the horizon as some have predicted.
In 2007, we saw what would happen when prices escalate to rapidly, masses of homeowners lost all their equity and were then upside down. We are 9 years into correcting the massive losses. There are still some areas where the homeowners are still underwater.
I think the worst part of this scenario is that there are no real clear answers moving forward. The costs of new homes are increasing steadily for the land, fees and the costs associated to bureaucratic regulations. Builders are caught between a rock and hard spot and the new home or apartment costs are skyrocketing.
The answer for some are that they are exiting the "California Dreaming" experience just out of trying to financially survive. Others are moving in, in hopes of turning their small investment in the housing market into a much bigger one ( creating wealth ) in the years ahead.