If you’re in the market for downtown San Diego real estate, there are a number of factors that you should consider before moving forward. San Diego continues to be one of America’s fastest growing cities. As nearly every other city, San Diego faced challenges due to the COVID-19 pandemic. Some trends that investors should be aware of as we exit these uncertain times are unemployment rates, availability, and the cost of rent or buying a home, just to name a few.
Unemployment in San Diego is relatively high, compared to the national average. As of January, 2021, San Diego’s jobless rate was over eight percent, while the national average was slightly over six percent. Experts predict that as tourism picks up, unemployment will drop.
The housing supply is very tight, and there are more people in the market seeking to buy homes than there are homes available. Experts predict the housing market will improve once the pandemic is behind us. Until then, San Diego is experiencing high rental vacancies. This is more likely explained by colleges and universities going mostly remote, so students didn’t sign leases for the previous year.
The median cost of a home is $655,000, representing a 9.2% increase year over year. San Diego properties may be overvalued right now, according to some experts, but property values have soared nationwide. The cost of rent is also up 4.3% year over year. The median rent in the city was $2,375 as of December, 2020. The national average cost of rent is $1,740.
San Diego is a growing city, and the increased property values and rent costs may just be reflective of that. The mayor has predicted that the city will more than double in size over the next two decades. If you have the finances and are interested in making San Diego a home or a place of business, the high price points shouldn’t deter you, especially with the city’s expected growth.