On Friday, Oct. 5, 2018, the San Diego Financial Literacy Center (SDFLC) held a free education luncheon in which members of the public were invited to spend their lunch hour listening to a panel of experts discuss the cost of housing in San Diego.

Moderated by the SDFLC’s Community Outreach Director Chase Peckham, the panelists included: Karen Begin, Director of Development San Diego Habitat for Humanity; Barry White, Director Navy-Marine Corps Relief Society NBSD; Jared Kelley, San Diego Lending Consultant/Educator; and Vincent Crudo, Crudo & Associates.

Here are some key takeaways from the panelists’ discussion:

• The average age of a first-time homebuyer is 33 years old, not only in San Diego, but nationwide.

• The average down payment on a home is 30 percent of your income, nationwide and in San Diego.

• There are 1.5 million renters living in San Diego. Of those renters, only 300,000 can afford a mortgage payment based on their current rent payment.

• San Diego is a semi-brand new city in that neighborhoods are constantly evolving and changing. Neighborhoods that were once undesirable have been gentrified and are attracting new residents.

• Experts agree, there are not enough housing units in San Diego. Even if you include available rental properties, there are not enough affordable rental properties available in San Diego to meet the demand.

• Affordability is the number one reason why people are reluctant to or unable to enter the real estate market. However, some experts argue we have to adjust our mind frame when discussing the cost of homes. In other words, just because the cost of burgers and beer increased in recent years, didn’t mean Americans stopped eating out at restaurants. But there was a mind shift in how people approached going out to eat, where they would dine out and how frequently they could afford to do so.

• In order to keep up with the demand for housing in San Diego, approximately 30,000 new homes would have to be built in San Diego each year. Currently, 10,000 homes are built each year in San Diego, which further increases the cost of each home.

• The average home in the Midwest or non-Coastal cities appreciates 2 percent each year. In San Diego, the average appreciation for homes is just under 6 percent annually. Experts forecast that in the next five years, homes in San Diego will appreciate more than 28 percent.

• Have a goal in mind when you purchase your home. Do you plan on buying a cheaper home to enter into the real estate market, sell it in a few years and then take that cash flow to invest in a larger property in a better neighborhood?

• Don’t feel forced to buy a home. Homeownership is not right for everyone and renting could be a more stable situation for some families. Renters are still invested in their neighborhoods and local schools.

• There are always costs associated with homeownership. Know what you’re getting into and have a plan for how many years you should live in the home in order to financially break even. The average homebuyer breaks even in three years.

• Societal changes, such as Baby Boomers taking out Home Equity Lines of Credit to fix up their property to stay in their homes longer, is lessening the number of properties available to especially new homeowners.

• The City of San Diego incentivizes builders to create more affordable housing by allowing a builder to build more units or to build higher buildings if they include affordable units.