November 29, 2022

Real estate market in San Diego
A rental sign outside an apartment complex in North Park. Staff photo

Well, the general slowdown in the economy is a silver lining for potential tenants in an otherwise gray cloudy sky.

Residential real estate website Zillow a recent data analysis found that typical rents in San Diego fell a bit month-over-month this fall.

To be sure, typical rent was nearly 13% higher than last year, reaching $3,105 in October, which puts us third nationwide for a year-over-year increase, Zillow found.

There is a nationwide pattern of falling rents, with typical prices falling by 0.1% monthly. This is the first monthly decline in 2 years.

The median rent in the US was $2,040 in October, a 10% increase from 2021.

“In our economists’ view, the small step back is reminiscent of a more ‘normal’ rental market, in line with the October declines in each of the three pre-pandemic falls,” a Zillow spokeswoman said.

According to the company, rents have fallen in all but nine of the US’s 50 largest metropolitan areas, including upscale markets like Boston and Miami and more affordable Midwest metro areas like Cleveland and St. Louis.

California cities have the most expensive major markets, such as San Jose where the typical monthly rent is $3,341, San Francisco is $3,199, San Diego is $3,105, and LA is $2,979.

Miami and New York had the highest year-over-year increases

Rent increases have eased after reaching a peak of 17.2% year-on-year in February 2022.

Americans’ demand for housing has slowed this year, after booming in 2021, thanks to higher rent costs and generally high inflation, Zillow found.

The analysis said more tenants are doubling down with roommates or family, increasing rent vacancy rates and putting pressure on landlords to keep rent increases in check.

This slower pace of rental growth is likely to be reflected in official measures of rental inflation in early 2023.

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Zillow also looked at the impact of rising rents on tenants.

According to the company, a San Diego tenant must work 85.5 hours each month before earning enough to pay the region’s typical rent of $3,110, the new Zillow analysis shows. That’s more than 74 working hours required five years ago.

Rents grew faster than ever last year, putting pressure on budgets as leases expired and renewals were due.

The rental market is now cooling, a Zillow spokesperson says, but the rent reductions have not yet fallen enough to have much of an impact on the wallet.

While rents have risen, wages have not kept pace with inflation, the spokesman said. Rents in the San Diego metro have increased 46.9% over the past five years. The average wage has only increased by 27%.

“Searching for a rental property in this market is stressful – 40% of tenants sleep during their search. Strategies such as being flexible about the move-in date and being one of the first applicants have helped recent tenants find a place to live,” he said.

Americans earning an average wage must work 62.6 hours to pay the typical US monthly rent.

Over the past five years, rents have increased by 36.9%, while the average wage has only increased by 23%.

* * *

Stone Distribution Co. said it will distribute beer made by Coronado Brewing Co. in Southern California and will represent much of Southern California.

Coronado Brewing says sales are currently up 20% since the start of the year.

Divide stonesfounded in the late 1990s, is now one of the largest independent distributors of craft beverages in the country.

The distributor became a standalone company, breaking away from the Escondido-based company Brew stone earlier this year.

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Pizza supplier and franchisor from Sacramento Pizza guys – opens its first store in San Diego in Pacific Beach.

The shop is located on 1975 Garnet Avenue, and will be operated by local entrepreneur Behzad Kazemiaccording to a press release.

The chain hopes to have more locations in the area in the future.

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The 2,670-passenger Diamond Princess cruise ship has departed from its new home port in San Diego. The ship’s home port here marks a group of new sailings from the operator Princess Cruisesranging from five to 16 days with excursions along the Mexican Riviera, the California coast and the Hawaiian Islands.

A unique 20-day return cruise to Central America is also scheduled for November 27, according to a news announcement. The cruise line is part of the publicly traded Carnival Corp.

San Diego is California’s third-busiest cruise port after LA and San Francisco, handling 93 ships before the COVID pandemic hit in 2020.

Port officials expect the terminal, which can accommodate three ships at a time, to recover this year, with more than 90 cruise ships docking at the city’s two terminals during the height of the season.

Princess Cruises operates a total of 15 ships in various global markets.

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Kearny Mesa Subaru is ringing in the holiday season with its annual “Share the Love” food truck event, which benefits local nonprofits Meals on Wheels San Diego County.

This event is open to the public and draws some of San Diego’s top food trucks to support area nonprofits, including Meals on Wheels.

The trucks will compete for the title of “Best Dish”, with local celebrity judges voting on the winning food truck.

Visit sandiegomealsonwheels.org for more information.

In the past 14 years, Subaru of America and its dealers have donated more than $227 million to more than 1,700 charities nationwide.

* * *

And finally, back to residential real estate news.

Home purchases by investors nationwide fell 30.2% year-on-year in the third quarter, according to a new report from the residential real estate sales and rentals site. Redfin.

According to the report, this is the biggest drop since the Great Recession, apart from the second quarter of 2020, when investor activity plummeted due to the outbreak of the pandemic.

And it surpassed a 27.4% decline in total home purchases nationwide.

Many of the cities where investor purchases declined are regions that surged in popularity during the pandemic, according to the report.

These regions include San Diego, along with Phoenix, Las Vegas, Sacramento, and Miami, which consistently feature on Redfin’s list of top migration destinations.

Investor buying here fell nearly 35% in October compared to October 2021.

Tom York is an independent journalist from Carlsbad who specializes in writing about business and economics. If you have news tips you’d like to share, send them to [email protected]

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