San Diego calls itself “America's Finest City." Most people have seen sunny San Diego on TV, with the year-round 70 degree weather and thought to themselves, "Wow, I’d like to live there!" And while it is undoubtedly a great, vibrant city, it is not without its flaws — particularly, housing flaws.
The city of San Diego has about 1.3 million people, and the surrounding areas of San Diego County increase the total metropolitan area to more than 3 million people according to Google. San Diego started to grow in the late 1800s and historically was a military and hospitality employment center. That started to change in the late 1980s because of defense cuts and a recession. However, there's still remnants of that history in defense. The Coronado Island naval base still stands, as does the Mirimar air base, where the well-known Top Gun flying program was based. But today, a large hotel, resort, and convention center makes the city's economic engine, as do its many fine colleges and universities, like San Diego State University. San Diego also has a small, but growing telecommunications industry lead by Qualcomm, and many bio-tech corporations and start ups in the La Jolla area.
But despite all those perks, one thing makes San Diego less than ideal for residence — the cost of housing. Living in San Diego is expensive, with an average house asking price of about $350,000 as detailed by HousingTracker. It’s gotten better lately with prices dropping and interest rates lowering, but it is still a pricey city for the average resident.
In addition, the rental market is somewhat distorted here, with generally low rents compared to the price of buying a home. This translates into a lot of renters in the market, and close to full occupancy that typically stays under 5.0%. Surprisingly, the full occupancy doesn’t translate into very high rents in comparison to housing costs. This is because San Diego simply does not have a large population of high wage and dual-income earners, meaning that there are not enough wealthy residents to increase rent rates.
Average rents in San Diego for a two-bedroom apartment run about $1,398 per month, according to RentJungle.com. And the average income for a family of three is about $68,000, according to the U.S. Department of Housing and Urban Development. That is a pretty tight financial picture, considering other costs like food, gas, electricity, etc. are pricey in San Diego as well.
Overall though, while San Diego is a great place to live, and rents are relatively reasonable, incomes are lower and housing prices and other basic costs are higher. For most people, this means you can live in America’s finest city and have a job, but you will have a tough time buying a home because they are just too expensive.
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