28 Jun San Diego Rental Market Booming
San Diego Rental Market Booming
Just like the housing market, the San Diego rental market is booming. After a major slow down in rent prices during COVID-19, the rental market is bouncing back. In fact, according to the San Diego Union-Tribune, rent in San Diego County has seen an increase of 5 percent. This is happening due to a statewide rent control law that started January 1, 2021, which states, rent can be increased a maximum of 5% per year plus inflation. And, in San Diego, that amounts to roughly 7 to 7.5 percent. Wondering what all of this means? Moving forward, rents will be increasing around 5-7% a year, every year. So this means, you can either pay rent (that will increase every year), or take advantage of low interest rates while you still can (and buy) to try and stabilize the cost of housing overtime.
AB-1482 Tenant Protection Act of 2019: tenancy: rent caps.
Although AB-1482 does not cancel existing rent control, it does establish what renters will pay each year in rent increases (5% + the cost of inflation). And, while it does help to control the cost of rent because the rent may only be raised once over any 12 month period, when a tenant leaves, the law no longer applies. In fact, rental property owners are permitted to establish new rent at any amount upon a tenant vacancy. In other words, a rent increase beyond the amount permissible is not capped when signing a new tenant. This means, a new tenant can be charged what ever rent rate is set by the landlord. But it does control future increase amounts. What does all of this mean? It may be time to consider buying a home (while interest rates are still low).
Buying A Home
Buying a home is a huge decision. Whether it’s your first time or you are “moving up”, it can seem like an overwhelming commitment. For many, it will be the biggest purchase of their lives. But some of the things that make buying a home scary aren’t that scary if you can just take a step back and consider why you are doing it in the first place.
Things To Consider
For example, you can either choose to continue paying someone else’s mortgage in the form of rent payments that will continue to increase every year. Or, you can take a chance while interest rates are still low and buy a home. After all, your interest rate once locked in will stay constant. And that means, stability and knowing what your fixed monthly expenses will be. To put this into perspective – today’s average 30-year fixed mortgage rate is 3.125% versus today’s annual average rent increase which will amount to 5% plus inflation. Again, this can equate to roughly 7 to 7.5% in the San Diego County!
How To Stabilize The Cost of Housing Overtime (Home Ownership):
Many people dream of owning their own home for the stability and peace of mind that comes with it. But what many also don’t realize is there are many tax benefits to owing a home. Not to mention the fact that San Diego rental prices will keep increasing. Here are some other facts that make owing a home so attractive (especially for those who live in San Diego).
A Few Things To Consider:
- Monthly housing will not go up 5-7% per year.
- You get tax deductions:
- Mortgage interest deduction
- Property tax deduction
- Self-employed individuals can add a home office deduction
- You can also benefit from tax credits for energy-efficiency improvements.
- Buying a home is a great long term investment that will pay off.
- Appreciation (over the long term) the value of your home will go up.
- Stability and peace of mind.
Need Help Buying A Home?
Considering a purchase? You can find no better full service, honest and dependable real estate firm than Rancho Mesa Properties. With an A+ rating with the Better Business Bureau of San Diego, Alan the owner (and real estate agent) of Rancho Mesa Properties has won the award for top 7% of real estate agents in the city of San Diego based on client service through San Diego homes and Gardens magazine. The guiding principles of our company are to listen to your goals and make them a reality.
At Rancho Mesa Properties, our philosophy is to make every client feel like they are the most important client we have! For those looking to buy, you should start preparing yourself now in order to move quickly when the home you want comes on the market. Those wanting more information should contact us at (858) 576-2176 we are happy to answer any questions you have about the San Diego Real Estate Market.