SAN DIEGO COUNTY, Calif. — A Zillow report that analyzed skyrocketing home values says appreciation on the typical home in the U.S. was about the equivalent of an oral surgeon's annual wages.
"It's a jaw-dropping number, and it's just a reflection of the intense demand in the housing market. In many cases greater than the amount that the typical person actually made as a salary,” says Zillow senior economist Jeff Tucker.
Tucker says that high price is even more true in Southern California, where home value growth since 2019 lists San Diego at 48.9% compared to Los Angeles at 33.8%, San Francisco at 26.8% and the U.S. at 37.8%.
He says in San Diego, the typical home rose more than $150,000 in value.
"It's probably not too outlandish to say that some people have gained more equity year over year than they make annually which is crazy to even say that,” said real estate broker, Beau Trickey of Compass Real Estate in San Diego.
Trickey says the pandemic made problems for potential home buyers worse with demand shooting up.
“It was the perfect storm during the pandemic of lower supply, higher or you know increasing demand and interest rates that were historically low and we saw price appreciation that we have very seldom if ever seen ever seen,” Trickey said.
Zillow says in 2021 home value growth far exceeded San Diego worker's median income.
For existing homeowners, this is mostly good news even with the recent rise in mortgage rates which is raising the interest cost of a mortgage.
"The home that you own is rapidly rising in value,” Tucker said.
Zillow says San Diego rent prices shot up since January 2020, rising to nearly $3,000 annually.
"They are rising on the order of 17% year over year in San Diego. A lot of folks especially if they got a bit of a bargain signing a lease sort of early in the beginning maybe and for a very rude awakening when they get a renewal letter this year.” Tucker said.
Trickey says the impact of people trying to transition from renting to owning is very difficult because of the competition out there for properties.
But he also says there is some light at the end of the home buying tunnel.
"Figure out what your finances look like and get with a good lender and decide just how much you can afford,” Trickey said.
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