The internet is buzzing over a recent article in The Wall Street Journal about apartments near San Diego, California.
The article, written by reporter Amy Chozick, notes that “as much as a quarter of all apartments in the San Diego metro area are rented out as condominiums, according to a new report from real estate consultancy CBRE.”
The article, based on data from Zillow, notes:”Between 2012 and 2022, rents in San Diego doubled, to an average of $3,600 a month for a studio apartment, or $2,800 for a three-bedroom unit.
That’s an increase of 1.5 percent.
The increase was especially pronounced in the South of Market area of San Diego.””
Rent growth for the South, which includes the heart of San Francisco’s real estate market, jumped 22.3 percent, or a staggering $13,937 a year for a two-bedroom apartment,” Chozik writes.”
This growth came after the housing bubble burst in 2014 and is likely the result of a sharp decline in the supply of new construction apartments in San Francisco,” she continued.”
The average price for a one-bedroom condominium in the city increased by 3.6 percent, to $2.7 million, after inflation.
The average price in the East-West area increased by 4.3% and the West-East area by 2.3%.
The East-South area was the only area to experience a price drop.””
For the South-East, the price of a two bedroom unit increased by 10.9 percent, rising to $1.9 million, according the data.”
The story concludes:”With the number of condominium apartments and rental properties rising, San Diego may have become the most expensive city in the country for renters.”
The real estate consultant CBRE told Chozack that it is a “misleading” narrative to compare San Diego to other cities.
“Our research indicates that San Diego’s rental market has been experiencing some of the largest increases in rental income in the US,” a spokesperson for CBRE said.
“In terms of the amount of new apartment construction, the median rent for a new apartment in San Juan Capistrano was $2 million, which was almost half of the median income in San Jose, which had an average rent of $2m.”
“This is because of the strong fundamentals of the San Juan market, including the strong pace of building and the low cost of real estate.”
If the trend continues, we will see San Diego continue to be unaffordable to many renters,” the spokesperson added.””
We are focused on the current market and we are working to increase affordability in the market.”
“If the trend continues, we will see San Diego continue to be unaffordable to many renters,” the spokesperson added.
“It is critical that renters understand that the San Francisco market is different and that the real estate environment has changed.
In addition, San Francisco is a large city with a high density of housing and many of its housing stock has undergone significant renovations in recent years.”
While CBRE pointed out that San Diegos housing market is currently “the most expensive in the nation,” it added that there is “no clear evidence” that San Francisco housing prices are “significantly out of line” compared to other US cities.