You always hear how renting is dumb and you are just throwing your money away. Under normal market conditions owning is a better financial decision than renting. However, real estate prices today in downtown San Diego are anything but normal.

I choose to rent rather than own because it’s A LOT cheaper today. Yesterday I got our building’s newsletter. It lists 9 properties for sale at an average price of $554 per square foot. If we extrapolate this rate to my 1770 square foot condo, it would have a sale price of $980,580. With 5% down that equates to a $5,509 monthly payment before property taxes. Adding 1.1% in taxes increases the bill another $899 to $6,408. Our building has a low HOA fee of $350 a month (most buildings are $600-$800). This brings the grand total to $6,758 a month.

My rent is $2,500. In other words I’m renting a million dollar condo for 37 cents on the dollar. Why would I want to buy? Why would anyone want to buy in downtown San Diego right now? Prices are falling and inventories are rising. The mortgage deduction is nice, but not nice enough for me to increase my monthly payment by $4,258.

lose money?

Photo by thethreesisters

Legacy Comments


Well, there is that little thing about building equity. And renting is always cheaper than a mortgage. But I do see your point, though if I were moving downtown right now, I’d probably still buy. 🙂


Building equity on a note that’s worth more than the home value. No thanks!