Congratulations San Diego! You just became the least affordable city in California. Based on income and single-family home prices, San Diego has surpassed Los Angeles and even San Francisco in being unaffordable, according to a study by OJO Labs. So is it possible to buy a home here in America’s Finest City, or does it even make sense?

Let’s do the math.  The average income in the county is a bit over $68,000 and the median home price is $764,000. A 10% down payment would be $76,400…how does one save more than a year’s gross income with rent and the cost of living being so high? Many home buyers are turning to parents and other relatives for help with the down payment and opting for lower down payment loan options.  But even at a lower down payment the monthly payments will be greater and likely include mortgage insurance. Buying a home is simply not affordable for much of the population. Housing inventory is at an all-time low, interest rates still very attractive and competition remains fierce so any softening in home prices is unlikely.

So where does this leave the average buyer?  Here are some options that might make buying feasible and not totally crazy:

Downsize your expectations. This might not be the time to buy your dream single-family home. Generally speaking, a condo or town home is less expensive and if looking at single-family homes, maybe 2 bedrooms would work instead of 3 or 4. A condo or smaller home can be a great steppingstone that allows you to build equity for a larger home purchase in the future.

Look outside your preferred area.  There are definitely areas in the county that are more affordable than others and they aren’t all an hour from downtown. If you are in the position to work remotely, even a few days a week, your options open up tremendously in both north and east county. Work with a Realtor and keep an open mind about neighborhoods that you’ve never explored.

Expand the family. Well, so to speak. Instead of turning that extra room into a home office or playroom, consider renting it to a friend or family member. Probably not your first choice, but if their rent and contribution to expenses makes the difference, it just might be worth it. Likewise, if there is space and zoning and budget allow, it might be worth investigating some of the new ADU options.

Consider a fixer. Cautiously.  There is a big difference between a home that has not been updated and a home that literally needs fixing, such as foundation, plumbing or electrical repairs. Buying a home that is not updated but has been maintained can be a real opportunity if you have vision and patience. Move in and gradually update a room at a time or as your budget allows. A few years down the road, you’ll have a great house to sell or just continue to enjoy.

Questions? I’m here for you so please don’t hesitate to give me a call.