Like many cities in the California real estate market, the San Diego housing market is among the best for real estate investing. America’s Finest City lives up to its name in 2019 and will continue to do so in 2020. There is a lot going on with San Diego real estate, however, apart from its high home prices and exceptional rental income. So what is the San Diego housing market forecast for 2020? Find out the answer by reading this blog post!
Related: 10 Best Places to Invest in Real Estate in 2020
San Diego Housing Market: City-Level Data
The backbone of San Diego real estate market trends is its market performance. The most accurate and efficient way to quantify any rental market is to use its real estate data. If you don’t know where to find San Diego’s data, then fear not. We’ve provided it here for you, using Mashvisor’s investment property calculator. If you’re interested in how we compile and compute our data for real estate rentals and markets, CLICK HERE!
- Median Property Price: $791,442
- Price per Square Foot: $501
- Price-to-Rent Ratio: 24
- Rental Income: $2,731
- Cap Rate / Cash on Cash Return: 1.3%
San Diego Housing Market Trends for 2020
From Mashvisor’s market data alone, there is plenty to discuss when it comes to the San Diego housing market. There are other pieces of information San Diego real estate investors need to know to succeed in the city’s market in 2020. Without further ado, here are San Diego’s real estate trends for next year.
1. San Diego House Prices Will Rise Slightly
Property prices are a large influencer of real estate. This is especially true in the California real estate market, the most expensive state market there is, with a median property price of $693,959, according to Mashvisor. As previously mentioned, the median price of a San Diego property is $791,442. While this is a pricey median, San Diego house prices have essentially stagnated in 2019. According to NeighborhoodScout, the city’s appreciation rate in the current year is -0.01%. However, house values are expected to rise by 1.5% in 2020 with prices to follow, according to Zillow. The good news with this price increase is that this rise is considerably slower than it has been in the recent past.
Find cheap houses for sale in San Diego with Mashvisor.
2. San Diego’s Cost of Living Is Projected to Be Less Than Many Californian Cities
Housing prices in the San Diego housing market are fairly expensive, relative to the nation. Fortunately, relative to the state, the same cannot be said of the city’s overall cost of living. This is particularly true in comparison to major Californian cities. According to NeighborhoodScout, San Diego’s cost of living is lower than:
- San Francisco’s (by 43%)
- Oakland‘s (by 11%)
- Los Angeles’ (by 4%)
- Orange County’s (by 5%)
San Diego’s relative affordability is a motivating factor for both real estate investors and property tenants, which we will get to later.
3. San Diego Will Be Neither a Buyer’s Market Nor a Seller’s Market
A rental market’s status as a buyer’s market or a seller’s market can have a considerable impact on a real estate investment. As it pertains to the San Diego real estate forecast for 2020, the present prediction is that it will be a neutral market. San Diego’s reputation as a relatively cool market compared to the rest of California makes buying an investment property a simpler process for real estate investors here.
4. The Economy of Silicon Beach Will Continue to Grow
A great strength of any traditional real estate investing market is its economic success. San Diego real estate investors have nothing to worry about in this regard. Breaking the top ten in the biggest US economies according to Business Insider, there are many economic indicators that exhibit the city’s growth. For instance, San Diego’s unemployment rate is 2.8%. This is lower than the national rate of 3.7% and significantly lower than the state rate of 4.1%. Its job market has increased by 1.4% over the last year and is projected to increase by 34.9% over the next ten years. To add a cherry on top, the average weekly wage in the city is $1,260, which is the 9th highest in big metro areas.
Related: These Are the Features of the Best Place to Invest in Real Estate
5. Property Demand Will Continue to Be High Due to Many Reasons
Roughly 53% of the city’s residents live in San Diego real estate rentals. There is a multitude of reasons why property demand is and will continue to be very high in the San Diego housing market. For starters, San Diego is consistently ranked as one of the best places to live in the US. The city has also had some of the highest population growth rates over the last ten years. Finally, as previously mentioned, San Diego houses for sale are expensive, which prompts residents to rent out rental properties as opposed to buying them.
6. Airbnb Will Remain Illegal in the San Diego Housing Market 2020
You may have noticed that we haven’t mentioned the Airbnb San Diego housing market as of yet. The reason is that non-owner occupied Airbnb rentals are illegal in the city. Owner-occupied rentals are permitted, albeit with many restrictions, including district codes and zoning areas. Unfortunately, it does not seem like this trend will change come 2020.
7. 2020 Will See a Profitable Real Estate Market in San Diego
Overall, the main reason to invest in real estate is positive cash flow. By purchasing San Diego real estate listings, real estate investors will easily accomplish this goal. As seen from Mashvisor’s data, the average rental income and return on investment are $2,771 and 1.3%, respectively. These are merely averages. Real estate investors who use Mashvisor’s Property Finder to find rentals will be able to generate even more in profit with their properties in the San Diego housing market. Get access to this tool now:
Best Neighborhoods in the San Diego Real Estate Market for 2020
Now that you know why you should invest in San Diego real estate in 2020, let’s talk about where you should invest. According to Mashvisor’s investment property calculator, these are the top neighborhoods to invest in in the San Diego housing market:
- Median Property Price: $119,900
- Price per Square Foot: $79
- Price-to-Rent Ratio: 5
- Rental Income: $2,162
- Cap Rate / Cash on Cash Return: 11.2%
- Median Property Price: $435,457
- Price per Square Foot: $363
- Price-to-Rent Ratio: 12
- Rental Income: $3,075
- Cap Rate / Cash on Cash Return: 4.3%
- Median Property Price: $394,838
- Price per Square Foot: $298
- Price-to-Rent Ratio: 15
- Rental Income: $2,232
- Cap Rate / Cash on Cash Return: 3.3%
- Median Property Price: $504,500
- Price per Square Foot: $304
- Price-to-Rent Ratio: 15
- Rental Income: $2,780
- Cap Rate / Cash on Cash Return: 2.6%
- Median Property Price: $450,033
- Price per Square Foot: $399
- Price-to-Rent Ratio: 18
- Rental Income: $2,104
- Cap Rate / Cash on Cash Return: 1.8%
Related: Where to Find Reliable Property Data for Your Real Estate Investment
All in all, the San Diego housing market is a top-tier market for 2020. With no San Diego housing bubble in sight, investors can expect lucrative long-term investing. To start searching for profitable houses for sale in San Diego, click HERE to start your 14-day FREE trial with Mashvisor!