Average San Diego home price is $1M

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

Greater association of realtors states average San Diego home price is $1M. This is an astonishing number when the median family income is $85K.

San Diego home prices have seemed high for at least 40 years, but $1M average price just makes the "sunshine tax" very apparent.

I recognize it is not cheap to live in an area that has the climate of San Diego, but society needs service people. Everyone needs a place to live. It is a difficult issue.

4 Reply

238 views

Investor-friendly agents in San Diego, CA

See the agents BiggerPockets members work with in San Diego, CA.

Most Popular Reply

Jim K.

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

I live in a duplex I paid $45K cash for in 2017. I rent out the top floor for $930 and live downstairs.

"If you're not yet wealthy but want to be someday, never purchase a home that requires a mortgage that is more than twice your household's total annual realized income." Thomas Stanley, The Millionaire Next Door.

It works. You just have to give zero f**** about what broke people think.

5 Reply

See this reply in the discussion

32 Replies

Jump to latestLatest

Sort by

Scott E.
Contractor · Scottsdale, AZ · Member since 2010 · 2k+ posts · 3k+ votes
4y
I'm actually surprised that this is new news! I don't know the San Diego real estate market but I do vacation there. Always figured it would be a $1M+ to buy anything in the region. Really nice area.
0 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
It's always been extremely expensive to live there. But I did for over 40 years and enjoyed every second.....
But the market will ultimately decide who gets to live where. There are 3 groups of people affected by this: 1) Those who already own there will reap the benefits as they sell, pocket the big $$ and move elsewhere. 2) Most of those who are considering moving there will probably not be able to. 3) Younger families will not be able to afford to buy a house and will either be stuck renting or will move elsewhere.
And then, years down the road, it will change...simple supply and demand.
3 Reply
Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
4y
If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

What has changed is a lot of the good paying jobs that used to be in California have dried up.

And instead of the working people owning the homes, a large percent are rented, many under government Section-8.

So instead of a hardworking middle class owning many homes, we have a low paid low skilled workforce living in rented million dollar homes.

It's not 1984 anymore--(or is it???)

3 Reply
Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
4y
My gut feeling says someone needs to make $110-120K per year (before tax) to live "comfortably" if they're moving to and buying in San Diego.
0 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Scott Mac:

If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

What has changed is a lot of the good paying jobs that used to be in California have dried up.

And instead of the working people owning the homes, a large percent are rented, many under government Section-8.

So instead of a hardworking middle class owning many homes, we have a low paid low skilled workforce living in rented million dollar homes.

It's not 1984 anymore--(or is it???)

>If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

I do not know your source, but the sources I access has San Diego appreciation double (or more) inflation for any period that I can find data on. For example NeighborhoodScout lists San Diego appreciation as 10/10 for this century and 5.4% annualized for the century. This is similar to the data from Case Shiller but Case Shiller seems to show the appreciation from 1985 would be a little higher (late 80s show great appreciation, early 90s had a small decline, late 90s was ramping back up).

The San Diego RE price always seemed high, but with appreciation double inflation over the last 22 years, the prices have continued to increase in inflation adjusted dollars. At least the interest rate is lower than at much of the past which helps the mortgage payment.
>What has changed is a lot of the good paying jobs that used to be in California have dried up.

This is not the case for San Diego. San Diego is one of five metropolitan areas—Boston; San Diego; San Francisco; Seattle; and San Jose, Calif. (Note 3 of these cities are CA cities and based on GDP CA is not declining)—that accounted for 90% of all recent U.S. high-tech job growth, according to the research by think-tank scholars Mark Muro and Jacob Whiton of the Brookings Institution and Rob Atkinson of the Information Technology and Innovation Foundation. The high-tech jobs continue to be created in San Diego, but these high-tech jobs pay less in San Diego than they pay in many other markets (the sunshine tax).

My view is San Diego has many people with good jobs that pay less than other locales (so the home expense is significant), but it also has service people and homeless people who struggle to live here (the home expense presents big challenges).

1 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Jaron Walling:

My gut feeling says someone needs to make $110-120K per year (before tax) to live "comfortably" if they're moving to and buying in San Diego.

With average rent being >$3k for a 2 BR and ~$4k for a 3 BR home, a household income of $120K could still be struggling. Recognize $120K is almost 50% more than the median San Diego household income and you can see why it is a challenge to live in San Diego.

Average Rent in San Diego, CA and Cost Information - Zumper

4 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Anyway Dan, what do you think is going to happen over the next, say, 10 years?
0 Reply
Jaron WallingPro Member
Rental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
4y
Quote from @Dan H.:

Quote from @Jaron Walling:

My gut feeling says someone needs to make $110-120K per year (before tax) to live "comfortably" if they're moving to and buying in San Diego.

With average rent being >$3k for a 2 BR and ~$4k for a 3 BR home, a household income of $120K could still be struggling. Recognize $120K is almost 50% more than the median San Diego household income and you can see why it is a challenge to live in San Diego.

Average Rent in San Diego, CA and Cost Information - Zumper

I could live in a luxury cardboard box behind the ADU if I moved there at my current 9-5 salary. That's astonishing.
1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Quote from @Jaron Walling:

Quote from @Dan H.:

Quote from @Jaron Walling:

My gut feeling says someone needs to make $110-120K per year (before tax) to live "comfortably" if they're moving to and buying in San Diego.

With average rent being >$3k for a 2 BR and ~$4k for a 3 BR home, a household income of $120K could still be struggling. Recognize $120K is almost 50% more than the median San Diego household income and you can see why it is a challenge to live in San Diego.

Average Rent in San Diego, CA and Cost Information - Zumper

So you're saying I can live in cardboard box if I moved there at my current 9-5 salary. That's astonishing.

A nice cardboard box though... :-)
Naw, the weather is insanely good, but it's not worth it any more.....you're way better off where you are.....
1 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Bruce Woodruff:

Anyway Dan, what do you think is going to happen over the next, say, 10 years?

The home appreciation cannot continue like the last decade but there is still a large supply and demand issue. I suspect the appreciation to be more in line with the inflation rate, but would not be surprised if it slightly lags the inflation rate due to rising interest rates.
I expect the rental rates are going to continue to increase faster than inflation and this is some of my thinking: 1) Traditionally rental rates lag the home prices. The home prices for the last 10 years have gone up significantly more than rent rates. 2) The Covid eviction moratoriums have resulted in a new risk having been identified. higher risk equates to higher income to offset the higher risk. 3) the housing shortage will continue. This implies renter options include a) rent at the existing rates b) move elsewhere (some people will choose this option, but not enough to alleviate the housing shortage) c) purchase. 4) the increased interest rates make it much more difficult for the first time home buyer (i.e. current renters) to purchase. Those selling a property can use the cash out to lower the LTV to not be as impacted by the interest rate. This is not an option for the first time home buyer.
Most renters are going to decide to stay in San Diego and are going to have to pay the market rent. This will require more sacrifices such as higher occupancy, longer commutes, more run down units, etc. Some people will choose to move to less expensive markets, but there are also many people moving to San Diego for the great climate and other niceties of San Diego.
The San Diego housing shortage will take more than a decade to be resolved (and may never be resolved as the land is constrained on South by Mexico, West by the Pacific, North by Camp Pendleton, and to the East it quickly gets harsh). Many/most residents of San Diego are going to have to continue to make sacrifices to live here (but to live with one of the best climates anywhere should require some sacrifices, but what is too much sacrifice?).
1 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
@Dan H. I'd bet you're right on most points. Although at some point, even the incredible weather cannot defeat the plain simple money issue - it just can't. My son and his girlfriend are looking right now for a 2BR place anywhere not too far east and they can't find anything much under $3000 mo. It's just crazy!
When I was a young man there it was always higher than elsewhere but not that much and the weather made it easy to justify.
Virtually everyone I know, that is retiring, is leaving - both to cash in on all that equity in their properties and for the obvious political climate (which of course will not affect some people like it does others:-)
I see SD becoming a land of very wealthy people and lots of homeless/illegals with a much smaller middle class. But it will survive if only because it is such a beautiful city, maybe one of the best in the entire world. They just need a football team..... :-(
2 Reply
Luka Milicevic
Real Estate Agent · Nashville, TN · Member since 2015 · 2k+ posts · 2k+ votes
4y
I mean there is a reason people are leaving California.
Forget the housing aspect for a second.
You also have to deal with one of the highest tax burdens of any state in the country. ADD the most expensive gas prices in the country.
Oh and on top of all that you have to pay for housing.
2 Reply
Jim K.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
4y
I live in a duplex I paid $45K cash for in 2017. I rent out the top floor for $930 and live downstairs.
"If you're not yet wealthy but want to be someday, never purchase a home that requires a mortgage that is more than twice your household's total annual realized income." Thomas Stanley, The Millionaire Next Door.
It works. You just have to give zero f**** about what broke people think.

5 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Luka Milicevic:

I mean there is a reason people are leaving California.
Forget the housing aspect for a second.
You also have to deal with one of the highest tax burdens of any state in the country. ADD the most expensive gas prices in the country.
Oh and on top of all that you have to pay for housing.

There is a lot of misinformation on the taxes, but you have the gas prices correct.
CA has the highest income tax bracket in the country (for those making a lot of money) but the median income tax paid is way below the average income tax rate. A large percentage pay no state income tax. Needless to say highest rate does not affect that many people. You can perform internet search to see exactly where the median income tax places CA.
Ca prop tax has an average rate ~0.7%. This average rate is reduced due to limited increases permitted (prop 13). This is far below the average property tax rate of states that have property tax. Of course 0.7% on $1m is a lot of money.
San Diego gas prices are crazy. Even high for California. In addition, I suspect most people would also be shocked at water bills here.
0 Reply
Ann-Marie Vargas
Realtor · San Diego · Member since 2017 · 32 posts · 10 votes
4y
@Dan Heuschele Yes I’m selling a home in Otay Ranch that the sellers bought for about 425k about 10 years ago. it’s under contract for 1,060,000, wild! I was born in SD so I’ve seen the crazy increase in house prices
0 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
Quote from :

Quote from :

I mean there is a reason people are leaving California.
Forget the housing aspect for a second.
You also have to deal with one of the highest tax burdens of any state in the country. ADD the most expensive gas prices in the country.
Oh and on top of all that you have to pay for housing.

There is a lot of misinformation on the taxes, but you have the gas prices correct.
CA has the highest income tax bracket in the country (for those making a lot of money) but the median income tax paid is way below the average income tax rate. A large percentage pay no state income tax. Needless to say highest rate does not affect that many people. You can perform internet search to see exactly where the median income tax places CA.
Ca prop tax has an average rate ~0.7%. This average rate is reduced due to limited increases permitted (prop 13). This is far below the average property tax rate of states that have property tax. Of course 0.7% on $1m is a lot of money.
San Diego gas prices are crazy. Even high for California. In addition, I suspect most people would also be shocked at water bills here.

We were paying 1.25% in san Diego County, we pay .65% in AZ. Electricity is much higher too. Almost everything is. You don't have to defend it @Dan H. it just is what it is. I never cared much for NoCal, but most of SoCal is beautiful - except LA :-)

0 Reply
Wesley I.
Investor · San Diego, CA · Member since 2019 · 286 posts · 135 votes
4y
@Dan Heuschele
Glad to have closed on a property last month a couple of hundred k below average. We would have been out priced by now in the area we were looking (S. Escondido) if we haven’t bought. Although im starting to see longer days on market and price cuts north of $50k. The horde of people going to open houses has calmed down too. Demand is getting really patient & picky
0 Reply
Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
4y
Quote from @Dan H.:

Quote from @Scott Mac:

If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>I do not know your source,...

My source is just my memory, and the inflation calculator.

When cars looked like below, SFH prices in Orange County Calif., seemed to be about $360-ish for what's around $1M today.

1 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Scott Mac:

Quote from @Dan H.:

Quote from @Scott Mac:

If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>I do not know your source,...

My source is just my memory, and the inflation calculator.

When cars looked like below, SFH prices in Orange County Calif., seemed to be about $360-ish for what's around $1M today.

The issue is the source of your starting number. Orange County did not hit $360k until 2001. In 1985 OC was around 50% of you starting number. San Diego was about $50k less than OC (so closer to 1/3 of your starting number). In 1999 we purchased a property 100’ from the ocean in San Diego at $375k (so $15k more than your stated number for 1985). Needless to say this property was much higher than the median price (over 163% of the 1999 San Diego median). It seemed very expensive then, now I wish I could have purchased more.

My source on prices going back to 1990 is the Los Angeles almanac.
1 Reply
Matthew McKee
Real Estate Coach · Boise, ID · Member since 2022 · 177 posts · 285 votes
4y
Too many posts I agree with to quote any one but if you need any more reasons to move to Boise, ID, DM me.
0 Reply
Scott Mac
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
4y
Quote from @Dan H.:

Quote from @Scott Mac:

Quote from @Dan H.:

Quote from @Scott Mac:

If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>I do not know your source,...

My source is just my memory, and the inflation calculator.

When cars looked like below, SFH prices in Orange County Calif., seemed to be about $360-ish for what's around $1M today.

The issue is the source of your starting number. Orange County did not hit $360k until 2001. In 1985 OC was around 50% of you starting number. San Diego was about $50k less than OC (so closer to 1/3 of your starting number). In 1999 we purchased a property 100’ from the ocean in San Diego at $375k (so $15k more than your stated number for 1985). Needless to say this property was much higher than the median price (over 163% of the 1999 San Diego median). It seemed very expensive then, now I wish I could have purchased more.

My source on prices going back to 1990 is the Los Angeles almanac.

Orange County is quite diverse in neighborhoods and in cities regarding pricing. I was referring to down by the ocean vs say, Anaheim or Fullerton which might skew the numbers down.

But what you say makes sense on a larger scale.
And those old cars sure were elegant.

0 Reply
Dan H.Pro Member
OP
Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes
4y
Quote from @Scott Mac:

Quote from @Dan H.:

Quote from @Scott Mac:

Quote from @Dan H.:

Quote from @Scott Mac:

If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>If you walk the prices back to 1985 or so, it looks like it's just keeping up with inflation--no real change.

>>>I do not know your source,...

My source is just my memory, and the inflation calculator.

When cars looked like below, SFH prices in Orange County Calif., seemed to be about $360-ish for what's around $1M today.

The issue is the source of your starting number. Orange County did not hit $360k until 2001. In 1985 OC was around 50% of you starting number. San Diego was about $50k less than OC (so closer to 1/3 of your starting number). In 1999 we purchased a property 100’ from the ocean in San Diego at $375k (so $15k more than your stated number for 1985). Needless to say this property was much higher than the median price (over 163% of the 1999 San Diego median). It seemed very expensive then, now I wish I could have purchased more.

My source on prices going back to 1990 is the Los Angeles almanac.

Orange County is quite diverse in neighborhoods and in cities regarding pricing. I was referring to down by the ocean vs say, Anaheim or Fullerton which might skew the numbers down.

But what you say makes sense on a larger scale.
And those old cars sure were elegant.

>I was referring to down by the ocean vs say, Anaheim or Fullerton which might skew the numbers down.

I do not know Orange County RE like I know San Diego RE (I used county wide public numbers in my OC historic values), but I question if the properties down by the ocean can be purchased today for $1M. So in the case of coastal properties, I suspect your end number is too low. I would expect the coastal properties to have appreciated at least as much as the county as a whole. In San Diego, the coastal properties have slightly better appreciation than the entire county since 2000.
Neighborhood Scout has orange county annual appreciation since 2000 as 10/10 for nation and 5.19% (total 204%). Inflation since 2000 totals 68%. So, OC RE appreciation has been almost 3 times the rate of inflation for this century. San Diego has higher RE appreciation than OC (San Diego has RE appreciation is over 3 times the inflation rate since 2000).
Sources NeighborhoodScout and the US appreciation calculator.
0 Reply
Justin Harper
Rental Property Investor · San Clemente, CA · Member since 2021 · 6 posts · 1 vote
4y
@Dan Heuschele
What sold for low 400’s in 2013 in San Clemente, CA is now over 1,000,000.
0 Reply
Jim K.
Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
4y
@Justin Harper

OK, there are 65 thousand people in San Clemente, and it's very much at the tail of Los Angeles. Just out of curiosity, and I really do mean this, where do the people who work in fast food, retail, grocery, the gig economy, lowbrow restaurant service, hospital/nursing care, and all the other poorly-paid jobs live? I literally know nothing about the area (visited LA once) and I'd love to know.
0 Reply
Bruce WoodruffPro Member
Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes
4y
They either live crammed into houses near the ocean, or they move inland. In most of Southern California, prices drop dramatically as you move East....because the desert awaits out there.....
0 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.