Picture a 750-square-foot one-bedroom apartment in San Diego’s North Park neighborhood. Hardwood floors, a balcony just big enough for a couple of chairs, and a galley kitchen with new appliances. For many renters in America’s Finest City, this is the reality of urban living — and it comes at a price. The cost of living in an apartment vs house in San Diego can vary widely, with monthly housing expenses eating up a big portion of take-home pay.
The Housing Market in San Diego Today
San Diego’s housing market is notoriously competitive, with limited inventory and high demand driving up prices. According to Zillow, the typical home value in San Diego is $944,228 as of April 2023 — a 16.5% increase from 2020. Rent prices have also surged, with the average rent for a one-bedroom apartment in San Diego hovering around $2,390 per month.
Despite the high costs, San Diego remains a desirable place to live thanks to its mild climate, beautiful beaches, and thriving job market. The city has seen an influx of new residents in recent years, particularly young professionals drawn to the tech and biotech industries. This has put additional pressure on the housing market, with new apartment complexes and condo developments popping up in downtown and surrounding neighborhoods.
However, the pace of new construction has not kept up with demand, leading to a persistent housing shortage. This has made it challenging for many renters and would-be homebuyers to find affordable options, particularly in popular areas like Little Italy, Hillcrest, and Ocean Beach. As a result, many San Diegans are forced to stretch their budgets or look further afield for housing.
Renting in San Diego: What’s Typical?
For renters in San Diego, the cost of living can vary depending on the neighborhood, apartment size, and amenities. According to RentCafe, the average rent for a one-bedroom apartment in San Diego is $2,390 per month, while a two-bedroom unit goes for around $3,020. However, prices can be much higher in desirable areas like La Jolla or the Gaslamp Quarter.
Young professionals and singles tend to gravitate towards trendy neighborhoods like North Park, Hillcrest, and Little Italy, where they can find a mix of apartments, condos, and small bungalows. These areas offer walkable streets, hip restaurants and bars, and easy access to downtown. However, the convenience comes at a cost, with one-bedroom apartments in these neighborhoods often renting for $2,000 or more per month.
Families and those seeking more space may opt for neighborhoods like Clairemont, Mira Mesa, or Carmel Valley, where larger apartments and single-family homes are more readily available. While rent prices in these areas may be slightly lower than in the city center, they are still well above the national average. A three-bedroom apartment in Clairemont, for example, typically rents for around $3,500 per month.
Owning a Home in San Diego
For those looking to buy a home in San Diego, the costs can be even more daunting. The median home price in San Diego County is $950,000, according to the California Association of Realtors. This means that a typical buyer putting 20% down would need to come up with a down payment of $190,000 — a sum that is out of reach for many.
Even for those who can afford the down payment, the monthly costs of homeownership can be steep. Assuming a 30-year fixed mortgage at 6.5% interest, the monthly payment on a median-priced home in San Diego would be around $4,800. This does not include property taxes, which average around 1.1% of the home’s value per year, or homeowners insurance, which can add several hundred dollars to the monthly bill.
For those living in a condo or planned development, homeowners association (HOA) fees are another cost to consider. These fees, which cover maintenance and amenities like pools and gyms, can range from a few hundred to over a thousand dollars per month, depending on the community. In San Diego, the average HOA fee is around $400 per month.
Renters vs. Homeowners: Who Lives Where?
Given the high costs of homeownership, it’s no surprise that many San Diegans choose to rent. According to the U.S. Census Bureau, just 53% of San Diego households own their homes, compared to 64% nationally. The homeownership rate is even lower among younger residents, with just 26% of those under 35 owning a home.
Renters in San Diego tend to be younger, with a median age of 36 compared to 54 for homeowners. They are also more likely to live alone or with roommates, rather than with a spouse or family. This reflects the high cost of living in the city, which can make it difficult for young people to afford a home on a single income.
However, even among older residents, renting is becoming more common. Many empty-nesters and retirees are choosing to downsize from single-family homes to apartments or condos, either to reduce maintenance responsibilities or to free up equity for travel and other pursuits. In San Diego, the homeownership rate among those 65 and older is 74%, lower than the national average of 78%.
Typical Monthly Housing Costs in San Diego
| Expense | Apartment (1BR) | House (3BR) |
|---|---|---|
| Rent/Mortgage | $2,390 | $4,800 |
| Property Tax | – | $875 |
| Utilities | $150 | $300 |
| Insurance | $15 | $150 |
| HOA | – | $400 |
| Total | $2,555 | $6,525 |
Estimates reflect mid-range properties and average usage.
What’s Driving Costs Up or Down?
The high cost of housing in San Diego is driven by a combination of factors, including limited supply, high demand, and restrictive zoning policies. The city’s geography, with the Pacific Ocean to the west and mountains to the east, limits the amount of developable land. At the same time, strict zoning laws and community opposition have made it difficult to build new housing in many areas.
On the demand side, San Diego’s strong job market and desirable quality of life continue to attract new residents from other parts of the country. The city’s tech and biotech industries, in particular, have seen significant growth in recent years, bringing an influx of high-paying jobs. This has put upward pressure on housing costs, as more people compete for limited supply.
However, there are some signs that the market may be cooling. In recent months, home sales have slowed and price growth has moderated, as rising interest rates and economic uncertainty have led some buyers to put their plans on hold. At the same time, new apartment construction has picked up, with several large projects underway in downtown and other areas. While it will take time for these units to come online, they could help ease the pressure on the rental market in the coming years.
FAQs About Housing in San Diego
- Is San Diego affordable to live in?
San Diego is one of the most expensive cities in the country, with housing costs that are well above the national average. However, many residents feel that the high quality of life and job opportunities make it worth the cost. - Why are housing prices changing?
Housing prices in San Diego are influenced by a variety of factors, including supply and demand, interest rates, and economic conditions. In recent years, limited supply and strong demand have driven prices up, while rising interest rates and economic uncertainty have led to a slowdown in sales. - How does San Diego compare to nearby cities?
San Diego is more expensive than many nearby cities, such as Phoenix and Las Vegas, but is generally more affordable than Los Angeles or San Francisco. However, each city has its own unique housing market and quality of life considerations.
Making Smart Housing Decisions in San Diego
For those considering a move to San Diego, it’s important to carefully weigh the costs and benefits of different housing options. Renting may be the most affordable choice in the short term, particularly for those who value flexibility or want to live in a prime location. However, average monthly expenses in San Diego can add up quickly, making it difficult to save for a down payment or other long-term goals.
Homeownership, while more expensive upfront, can provide a sense of stability and the opportunity to build equity over time. However, it also comes with additional costs and responsibilities, such as maintenance and property taxes. Those considering buying a home in San Diego should carefully evaluate their budget and long-term plans, and be prepared for a competitive market.
Ultimately, the decision of whether to rent or buy in San Diego will depend on individual circumstances and priorities. By understanding the cost of living in San Diego and the factors driving the housing market, residents can make informed choices that balance their needs and financial goals. With careful planning and a bit of creativity, it is possible to find a place to call home in this vibrant and dynamic city.