While San Diego may not be the most expensive city to own a home, it is considered the least affordable.
According to a study conducted by Realtor.com, San Diego ranks as the most unaffordable city in terms of real estate in relation to income.
“In more than 90 percent of the zip codes, less than half of the people can afford to buy homes. That’s the worst in any metropolitan area in the U.S.,” said University of San Diego economics professor Alan Gin.
http://fox5sandiego.com/2015/02/03/san-diego-ranked-as-least-affordable-city-in-u-s/
I think the issue is that SD is half resort town and half High Tech employment center, makes it a little harder for the folks at the lower end of the income spectrum.
At least in Maui you don’t have to compete with the biotech engineers and QCOM employee’s, just the millionaire’s.
Thats depressing! That means most people buying now in SD will have put most of their savings into their house leaving a smaller pot for long term finance investing like college and retirment. After taxes, HOA, maintenance etc I am not sure if they will ever see that back unless the SD real estate market continues on upward trajectory.
Could this be due to the low ‘income’ of retirees skewing down the overall median household income?
Wow, good one FreedomCM,
I think your on to something there, SD seems to be a place where retirees just stay put more than most other SoCal locations.
But I think you put that down as part of living in a resort town as well.
I think that record low interest rates is a huge factor in the reason why homes are so overpriced here in San Diego. When rates go back up, prices will have to come down.
Another factor with high home prices is even if current home owners wanted to sell their home and move up to something better, they can’t afford it either. So, they stay put.
@Mike
We are in bizzaro world with respect to real estate. Especially in SoCal. No matter how many times I did the math, it made no logical sense for us to buy a house based on the very same things you mentioned.
However, what couldn’t be ignored was that so long as we had a dual income household – both our salaries are above the median income – we were getting hammered in taxes every year with the prospect of taxes increasing over time. Neither one of use makes enough to support the family on one income. Therefore, we bit the bullet and bought as much house as we could “afford”.
Buying a house for tax reasons is the wrong way to do it, but I was running out of options. The government and banks have pretty much forced me to buy a home.
Reading this post opens my eyes as to why it seems like it is so hard for local businesses to find reliable hard working employees in this area in the lower end income spectrum and consistently generate a quality end product compared to other areas in the country.
Mike Said:
“That means most people buying now in SD will have put most of their savings into their house leaving a smaller pot for long term finance investing like college and retirment.”
imo, I don’t think it means that at all. That’s like saying “most people buying a house in Beverly Hills will put most of their savings in the house…” It’s not true because most people buying houses in Beverly Hills can AFFORD buying a house in Beverly Hills. You don’t HAVE to live in San Diego. You can buy an hour away, further inland, and drive a Prius to work.
As far as complaining about being priced out, almost everyone is priced out of somewhere. Say “hello” to San Marcos.
@ daytrip
Comparing Beverly Hills population 35K to North County population 1 M is like comparing apples to wasabi root. Better comparison is La Jolla to Beverly Hills which btw is much more expensive in housing.