San Diego Real Estate Voice : San Diego Renters and Thier Benefactors

San Diego Renters and Thier Benefactors

 

San Diego Renters and Thier Benefactors

 

The cost of renting in San Diego has now become a personal trap of preventing instead of facilitating future homeownership. For a majority of  people, renting used be a temporary condition where future homeowners would save up down payments to purchase their own homes.

Not so much now with rents far exceeding the typical monthly cost of homeownership. There is little opportunity to save for their own future home purchase. This also presents a conundrum of sorts for future growth and stability of the communities that make up San Diego.

Here we have some of the lowest interest rates in over a decade and so many would be first-time Buyers are now caught in the position of living pay check to pay check with little ability to save for a down payment. As real estate professionals, we know all too well that when the first levels of homeownership become stagnant or immobile, that it affects negatively on those that would like to be move up buyers. 

We have also seen where this condition ultimately has a negative effect on home values. Just the opposite is happening today with home values continually increasing because available housing supply has been greatly diminished and builders can not afford to provide the affordable housing so much needed today to fill the need. Land costs and building fees keep going up in direct relationship to the increasing home values caused by an unbalanced supply and demand.

While there are certainly lots of winners in the above scenario, most renters, and future homeowners are not among them. Their benefactor landlords are doing quite well, however. Fewer homes available to buy means more will be trapped the rent cycle in the years to come. And the ultimate issue is fast becoming that affordable rents have all but disappeared and more and more financial resources are required just to afford basic housing. 

I wish I had an answer but the situation seems to have a life all of its own. 

 

 

 

 

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Comment balloon 11 commentsWilliam Johnson • August 16 2016 02:22PM

Comments

 Yes that is a conundrum for millions of Americans. I started investing in real estate when I was 20 years old and have never looked back. I hope someone finds the answer William Johnson 

Posted by Paul S. Henderson, REALTOR®, CRS, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Northwest.) over 3 years ago

Hi Paul S. Henderson, REALTOR®, Broker, Tacoma Washington , Somewhere between profit and the mess that is continuing, there must be some sort of answer that is going to protect communities and the ability for its citizens to be able to obtain and sustain housing in an affordable manner. 

Posted by William Johnson, Retired Real Estate Professional (Retired) over 3 years ago

Hi William, you make a really good point to become a home owner. I hope all is well with you.

Posted by Noah Seidenberg, Chicagoland and Suburbs (800) 858-7917 (Coldwell Banker) over 3 years ago

Hi Noah Seidenberg , Thank you for your comment. I am doing well, thank you and hope this finds you thriving as well. Homeownership needs to be stressed now more than ever that Buyers need to beg, borrow and otherwise do anything they can to get into the ownership cycle. It's sad that with rates so lowthat the  required equity factors of ownership are limiting to so many. 

Posted by William Johnson, Retired Real Estate Professional (Retired) over 3 years ago

Hi William - You make a very valid point, and I can relate to it since we're experiencing the same thing in our markets, but from a lower point on the curve. And I don't see any easy - or even semi-difficult - fixes on the horizon.

Posted by Dick Greenberg, Northern Colorado Residential Real Estate (New Paradigm Partners LLC) over 3 years ago

Hi Dick Greenberg , The situation here is becoming a real obstacle for so many potential buyers. Even overpriced listings are being scoffed up and the supply is really at a very low point. There is a strong potential of this manifesting itself in ways that will affect housing for a long time. 

Posted by William Johnson, Retired Real Estate Professional (Retired) over 3 years ago

William - You have hit on an issue that many don't consider.  The problem of having rent chewing up a good portion of a monthly budget and not being able to save for a down payment to buy.

Sacramento has experienced heavy investor activity.  And, while the landlords are doing quite well, as you say, many of them aren't taking good care of their properties, especially landscaping.  Between drought restrictions on watering, and the property owner neglect, I see a perfect storm of blighted neighborhoods.

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) over 3 years ago

Hi Myrl Jeffcoat , Actually I thought of mentioning it as we have the same situation here. The cost to beautify the neighborhoods is going to be very expensive. As I look around there is nothing much green and the grass is gone. We are supposed to respond by recognising that we live in a desert. When I hear that, my mind jumps to one of the most beautiful and lush deserts , Palm Desert. They have the lushest lawns one would ever want to see. Something must have been lost in the translation when the gov decided that we should kill all the grass and shrubs and let the sun beat down and kill anything else we might have missed. Brown is the new Green. 

Posted by William Johnson, Retired Real Estate Professional (Retired) over 3 years ago

William- you make an excellent point about home ownership. With interest rates so low, you would think it would create a positive atmosphere for buyers. But having gone through our recent economy, tuition loans, and just trying to recover, many buyers are doing all they can to pay for rent and other living expenses.

The majority of calls I'm receiving for my services are from investors.

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) over 3 years ago

William  My market, like yours has a large military component.  The last market turndown dampened their investing enyhusoasm unless yhey know thry will return ur retire and work in the government or for a contractor

Posted by Karen Kruschka, - "My Experience Isn't Expensive - It's PRICELESS" (RE/MAX Executives) about 3 years ago

This is good information to share.

Have a most productive September!

Posted by Roy Kelley (Realty Group Referrals) about 3 years ago

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