San Diego is in the news again, but it’s about the cost of living this time. CNBC lists San Diego in their top list of cities with high rent. They say the average cost of rent in San Diego is comparable to other California cities like Los Angeles, Long Beach, and San Jose. Yet Fox San Diego reported rent prices went down in June this year. What’s the scoop right now on average rents in San Diego? What can we expect in 2023?
Nation Trends for Rentals, 2022
The latest reports show rent prices increased by 30% in the past year. Investor Place says, “Rising rent payments have proven to be one of the more direct consequences of elevated prices.” Near-runaway inflation raised the price of just about everything, including rent. The issue is also a housing shortage, with most estimates suggesting the U.S. was short about 3.8 million housing units in 2020.
Nationally, the average rent in August 2022 was $2110, up from $1,650 the prior year. However, according to The Golden State’s new plan, states like California have a plan for building more homes; 2.5 million will go up in the next eight years. Will this drive down the high cost of rent in 2023?
Will Rent Go Up in 2023?
While rent costs did decline a little in June (Realtor.com says by just $10 on average), all signs point to higher rents in 2023. CNBC points out, “But a one-month decline in rent prices isn’t necessarily the start of a long-term trend. In fact, rent price growth will likely remain elevated well into 2023.”
Rental demand is also expected to grow, primarily due to the rising costs of homeownership. The Federal Reserve Bank of Dallas forecasts rental price growth from 5.8% to 8.4% by May of 2023. With the feds hiking interest rates, that’s good news for property investors, who expect to continue rent increases to counteract rising costs.
Five U.S. Metropolitan Areas with the Highest Rent in 2022
CNBC reports on the five metropolitan areas in the U.S. experiencing the highest cost increases for single-family monthly rentals:
- Los Angeles (CA) area, including Anaheim and Long Beach $4,664
- San Diego (CA) area, including Carlsbad $4,617
- Bridgeport (CT) area, including Norwalk and Stamford $4294
- San Jose (CA) area, including Santa Clara and Sunnyvale $4,294
- Oxnard (CA) area, including Thousand Oaks and Ventura $4,259
Perhaps unsurprisingly, San Diego, the second-most expensive city for renting, is also the second-most desirable location to rent a home. No surprises here; San Diego is also ranked among the top 25- most beautiful cities to visit worldwide. For investors, these numbers are a good sign that the San Diego market an important target for portfolio growth. But what’s going on with the average cost of rent in San Diego?
What’s the Average Cost of a 1-Bedroom Rental in San Diego?
Average rents in San Diego for a solo-bedroom apartment start at $2,916, according to Rent Café. However, the average apartment size is 875 square feet. Studio and one-bedroom apartments are the most affordable in the area, but two- and three-bedroom apartments offer increased square footage for a higher cost.
The average apartment rent in San Diego varies by neighborhood. For example:
- Carmel Valley, North City, and Torrey Hills have an average rent of $3,944.
- Torrey Highlands average rent is $3,669.
- Miramar average rent is $3,212.
- Bernardo Springs, 4S Ranch, Santa Fe Valley, and The Lakes average rent is $3,117.
Some of the more affordable average rents in San Diego are in Alta Vista, Broadway Heights, and Emerald Hills, which costs around $1,300 for a one-bedroom apartment.
What’s the Average Rent for a 2-Bedroom Apartment in San Diego?
NBC San Diego reports renters are struggling with rent these days, despite a small decline in average costs this summer. If the average rent for a 1-bedroom in San Diego is $2,916, you can assume a 2-bedroom is a bit higher; and possibly quite a bit, depending on the neighborhood. To afford this, individual incomes must fall somewhere in the $97,440 range.
The average rents in San Diego continue to spike, partially because the city’s tech and innovation hubs continue to grow. The city is number six for business incubator sites; and business innovators continue to invest in the region. So, while Orange County and LA are declining in these areas, San Diego is still climbing. That means techies flock to the city to be a part of The Golden State’s new Silicon Valley.
What is the Average Rent for a 3-Bedroom House in San Diego?
The average cost of rent a three-bedroom home in San Diego is around $3,350, according to Zillow. That is $1,225 higher than the national average.
Is San Diego a Good Housing Market for Investors?
With San Diego rents higher than the national average, and with the city ranking high on the desirable places to move lists, the city offers good investment potential for most property owners.
San Diego Real Estate Hunter calls the city the number 1 real estate buy in 2022/2023. They list their reasons as:
- Home prices continue to pay top dollar, and residents are flocking to the region. The average cost of townhomes and condos are around $558,000.
- Residential housing starts are increasing and San Diego has done a nice job driving this market.
- San Diego mortgage rates remain low, between 3 to 5%.
- The foreclosure market remains a lucrative option for landlords looking to pick up property for less. Distressed sales increased in 2022.
- Property crime is still lower than many California metropolitan areas, including San Francisco, San Jose, and Los Angeles.
Tenant Planet remains a top choice for San Diego landlords looking for an expert yet cost-effective property management company. We have the tools and track record to help maintain successful operations of your San Diego-based properties. Call on us.
Los Angeles, Anaheim, and Long Beach (CA) $4,664
San Diego and Carlsbad (CA) $4,617
Bridgeport, Norwalk, and Stamford (CT) $4294
San Jose, Santa Clara, and Sunnyvale (CT) $4,294
Oxnard, Thousand Oaks, and Ventura (CT) $4,259
Average rents in San Diego for a one-bedroom apartment start at $2,916. The average apartment size is 875 square feet. Studio and one-bedroom apartments are the most affordable in the region, but the two- and three-bedroom San Diego apartments offer higher square footage for a higher cost.
The average rent for a 2-bedroom San Diego falls somewhere between the 1-bedroom price of 2916 andthe 3-bedroom price of $3,350.
If you’re renting a three-bedroom home in San Diego the average cost of rent is around $3,350.