San Diego is one of the fastest-growing cities in the U.S., making it a hot spot for investors. Investing in real estate can be very rewarding when you choose the right assets. Real estate investors make their money through rental income, profits made by business activities from the property, and appreciation.
As an investor, you can create a steady cash flow and great tax returns. Here is what you need to know about the San Diego housing market, including professional forecasts and 2021 trends.
San Diego Today
San Diego is growing fast. This is due to the city’s wide appeal to single people, families, and retirees. People are flocking to San Diego because of its beautiful weather, beaches, excellent universities, fitness culture, and great food.
San Diego real estate is expensive, but compared to other cities in California it is relatively affordable. For many residents, renting is the most reasonable option. This is why San Diego is a great place for investors to purchase properties and collect rent for a profit!
Current State Of The Market
Like many other cities, the San Diego housing market took a hit due to COVID-19. Although the pandemic created economic instability, the price for rent has risen in San Diego due to high buyer demand and low supply.
Trends Investors Should Be Aware Of
You should research your market and be aware of trends that can affect you as an investor. Here are some factors to look out for.
According to the State of California’s Employment Development Department, the unemployment rate is at a steady 8.3% as of May 2021. San Diego’s economy sources many jobs from tourism and unfortunately hasn’t had many tourists due to the pandemic keeping popular hot spots closed or limited. The unemployment rate is something to be aware of when considering how to attract renters.
2. Housing Supply
The housing supply in San Diego is constrained due to geography and limitations set in place by the government. San Diego is on the coast and the Cowles mountains limit city expansion. City regulations prevent tall condos, making it hard to meet demand.
New investors may have trouble entering the market due to competition and limited supply. As we move to a post-COVID era, the housing supply is expected to expand. Currently, San Diego is seeing expansion in single and multi-family housing.
3. Rental Vacancies
Rental vacancies have increased in the past year due to virtual learning. Because of the pandemic, many students decided to opt out of dorm living and sign leases at apartments to avoid crowded, communal living. Students are now accustomed to virtual classes at home. This has created a higher demand for housing and apartments in San Diego.
4. Median Housing and Rent Price
In San Diego, the median price of a house has reached an all time high of $672,750 which is a 14.6% increase in a year. Experts credit this to low mortgage rates, low interest rates, and limited home supply. The average rent in San Diego is $2,255. Now might be a good time to scope out the market and wait for prices to lower before you invest.
Conclusions On The San Diego Real Estate Market
San Diego appeals to a wide range of people and therefore has great investment potential. Investing in highly demanded neighborhoods with a great school district, or in a trendy area popular with locals and tourists can be very profitable for investors with a heavy budget. With planning and research, you can create a steady income for many years.
Stay Updated On All Things San Diego
Are you looking to invest in the San Diego real estate market? If so, you have an exciting process ahead of you. Our team at New Venture Escrow can guide you through the process of buying a home as well as offer resources to help get you started! We are dedicated to giving our clients a smooth and transparent real estate process.
Feel free to ask us for more tips and contact us at New Venture Escrow to begin your real estate journey today.