by Photo courtesy of Stessa

A new study conducted by Stessa found San Diego as the 16th worst large metropolitan area to buy a rental property in the United States.

The study found that the median home price experienced an increase of 26 percent and is now $809,206 in the San Diego metro area. A composite index was based on five key factors real estate investors consider with evaluating a market, including the gross rent multiplier, recent and forecasted home price growth, effective property tax rates, and population growth.

Researchers deemed San Diego the 16th worst large metropolitan area to buy a rental property in the United States with all five factors taken into account. 

Data pulled from San Diego, Chula Vista, and Carlsbad found that the median monthly rent was $2,251, and the median home price was $809,206. At the national level, the median monthly rent is $1,435, and the median home price is $308,220. The increasing price is a common tale told since the pandemic's beginning. 

The numbers show that the composite index ranks at 37.31 and the gross rent multiplier at 30.0.

Researchers found that the year-over-year change in-home price increased by 26.5 percent. In comparison, numbers shown at the national level reflect a year-over-year increase in the home price of 18.4 percent. 

The forecasted home price growth in San Diego increased by 21.3 percent, and the effective property rate is 0.73 percent. 

San Diego's year-over-year change in population in the identified area increased by 0.1 percent.  The year-over-year change in population reflects a 0.4 percent increase at the national level. 

Real estate investors can consider these factors when searching for the least location to invest. According to Stessa, markets that have a low gross rent multiplier, low property taxes, and a positive outlook for future property value growth offer the best mix of conditions for a potential investor.

Researchers say southern states tend to have some of the lowest housing prices and lowest property taxes of any region but will soon see boosts in property values as the region sees some of the fastest growth of people seeking housing. 

The study uses data from the U.S. Census Bureau, Zillow, and the Department of Housing and Urban Development. Only locations with at least 100,000 residents and available data from all sources were included in the analysis.

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