Recent reports state that the average rent on a Class A apartment in San Diego has surpassed the average monthly mortgage payment in a single family home in San Diego County. While two years ago the average mortgage payment on a single family home was about $2,000 more than the average Class A Apartment asking rent. Today the Class A Apartment rent is $1,640 which is just a $100 more than the median single family home mortgage payment.
This has clearly been caused by the median single family home prices falling by about 55% in the past two years, or about 25% in the past year. To reach $275,500 for Quarter 3 of 2009. However, even with such a drastic fall in single family home prices there still remain a gap in the affordability of people to buy these homes. The metro’s median houseful income has fallen nearly 5% to $58,200 per year which is nearly $5,000 less than the income required to qualify for a median priced home.
While on the other hand though rents have declined, they have not declined as dramatically. In fact, 2009 will be the first year in more than a decade where rents have fallen in the city. Asking rents are forecasted to fall by 2.5% to $1,310 per month by end of 2009 while effective rents are projected to decrease by 4.3% to $1,246 per month.
With such a lackluster market it is not a surprise if household growth in San Diego is expected to be just 0.3% with an addition of only 2,800 households this year.
So is it actually cheaper to rent than own, or own than rent? We are interested in your views while we come up with an article on that soon.
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