San Diegans spent $86 billion on rent in the last decade
San Diego rent price growth exceeded the national gain of 46 percent over the last 10 years
Renters in San Diego County spent $86.2 billion on housing over the decade as rent prices steadily increased, according to an analysis by Zillow.
From January 2010 to December 2019, San Diegans saw the amount they spent on rent increase 53.6 percent. That’s based on a Zillow estimate of median rent in January 2010 of $1,997 a month and $2,548 a month now.
San Diego rent price growth exceeded the overall national gain of 46 percent over the last 10 years, but it was largely in the middle of the pack among the nation’s 50 largest metro areas.
For instance, rent paid was up 38.7 percent in the Los Angeles metro area and 35 percent in New York City — lower than San Diego. However, in Austin, rent was up by 92.6 percent in the same time period, 91 percent in Raleigh and 65.8 percent in San Jose.
Looking at overall rent paid can be a bit tricky because of variable factors like population growth rates and — especially in the case of Austin — an influx of higher paying jobs that can fuel rising rent prices.
However, the analysis also shows that on a percentage basis, the total money going to rental housing is rising compared to wages and other living costs, said Skylar Olsen, director of economic research at Zillow. She said while there are a variety of trends to point to in the 2010s that are good — record expansion, very low unemployment, some income growth — they don’t take into account the increasing amount of money going to rent.
“All of that ignores the cost of life’s basics are increasing above and beyond that growth,” Olsen said. “Yes, the unemployment rate is at record lows. Yes, mortgage rates are at record lows. But, the challenge you have to make it is still as hard, or harder, than it has ever been.”
She said when renters put too much money toward housing, it limits the ability to save for a home down payment, pay for school and save for retirement.
Over the 2010s, U.S. renters spent $4.5 trillion on housing, Zillow data showed. The biggest of any year was 2019 with $512 billion going toward rent. Rents grew the fastest in 2015 — up 6.5 percent annually — as the economy powered out of the recession.
Rent costs over the last decade took up a large part of spending in America’s larger cities, such as $506.9 billion in New York City, $345.9 billion in Los Angeles, and $133.6 billion in Washington, D.C.
Zillow’s estimate of median rent prices tends to skew a bit higher, the result of a proprietary formula calculating costs. Its recent estimate of monthly rent in the San Diego metropolitan area, which covers all of San Diego County, was $2,548. That’s significantly higher than the estimate of $1,852 a month from real estate tracker CoStar for the third quarter.
Olsen said there are reasons why rent may not go up at the same pace in the next decade, at least at the start. She said homeownership rates are ticking up and rental appreciation is expected to slow, meaning total rental spending could head lower.
While many real estate analysts are bullish on an upcoming “Silver Tsunami” of Baby Boomers leaving homes, Olsen said it is unlikely to affect San Diego much because it a desirable place to live.
“San Diego is insulated from the impact of the Silver Tsunami because you are exclusive,” she said. “In other words, San Diego is such a beautiful place to live, it’s by the coast and highly sought after. People that don’t live there now want your housing units.”
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