San Diego Cost Of Living

This is a transcript of a talk I gave when the Navy moved the SPAWAR division to San Diego, but the numbers have been updated.

I was qualified to give the talk because I've lived for 25 years in New Jersey and for 29 years in California, so I have experience living on both sides of the country. In San Diego County, I've lived inland and along the coast, so I have a working knowledge of the entire North County area. I've been a Realtor in San Diego for the past 17 years. I'm a Certified Residential Specialist (CRS) and an Accredited Buyer Representative (ABR).

Housing Prices

Total housing expense includes:
· Principle & Interest
· Taxes
· Insurance
· Homeowner Fees
· Maintenance

· Principle & Interest
When people come to visit San Diego, they usually go to La Jolla or Del Mar, and pick up a flier outside a house for sale. They're shocked at how expensive San Diego is! But let me assure you, there are many affordable neighborhoods in San Diego, and those expensive beach areas are not typical prices. In fact, our average prices look higher than they really are because of the very high priced real estate we have in some areas. The principle & interest on your loan is determined by the price of the house, the interest rate, and the down payment used.

· Taxes
· 1% Property Taxes thanks to Proposition 13
· Voter Approved Bond Issues usually amounts to around .2%
· Mello - Roos = Special Assessment for New Infrastructure

Proposition 13 limited property taxes to 1%, plus any voter approved local bonds. Typically, taxes are around 1.2%, so it's easy to calculate. A $600,000 house would have taxes of $600 a month, for example.

Prop 13 did not provide enough revenue for cities to develop infrastructure for new areas. Two Democratic congressmen, Mello & Roos, figured out a way to pay for new roads, fire stations, parks, & schools. It's called the Community Facilities Act, but we just call it a Mello-Roos. Usually a 30 year bond, a MeIlo-Roos will show up on your tax bill in addition to the 1.2%.

Most new areas in Carlsbad, Carmel Valley, etc. will have a Mello-Roos. It varies with each area, but I've seen it range from $50 to $500 a month.

So if you're considering new construction, you can't just look at the price only! You have to ask what are the homeowner fees or Mello-Roos assessments.

· Insurance
Fire insurance is not hard to get. Some companies are limiting their risk by writing only a certain amount of policies in any one area. So you might not get the company you want, but it's no problem to get insurance. Ours runs around $750 a year.

In over 200 transactions, none of my clients has purchased earthquake insurance. It's available, but San Diego has the lowest risk of an earthquake anywhere in Southern California. Most San Diegans don't want to pay the high insurance cost to subsidize high-risk areas like Los Angeles or San Francisco.

· Homeowner Fees
Some areas have homeowner fees, which are not tax deductible. These fees average around $50 for a neighborhood with some common landscaping, to around $250 for a gated area with private streets and a community pool. Beach areas tend to run higher because the salt air increases the maintenance required.

· Maintenance
· Painting - $0
· Roofing - $0
· Frozen Water Pipes - $0
· Snow Removal - $0

A stucco house with a tile roof and metal roll-up garage door requires no painting or maintenance. You can live in it 10 years and then sell it, never having lifted a finger. Maybe you would have to paint the fascia boards, but that's usually the only wood on the outside of the house.

The stucco color is mixed right in the concrete, so it never needs to be painted. Some people paint it to change the color, and then you have to continue to paint it. The correct way to change the color is to do a fog coating, which is spraying on another thin color coat of stucco.

Our climate is very mild. There are no freezing problems, or snow blowers anywhere. No storm windows. Palm tree leaves don't clog the gutters. In fact, our average rainfall is only 9 inches per year, so many houses don't even have gutters. It's as easy as it gets.

Gas & Electric

My gas and electric bill is around $120 a month on average. To give you an idea of my usage, my wife and I have a teenage daughter, 3 TVs, a home office with 3 computers, laser printers, and a copy machine. We live in a 2200 square foot home at the top of a hill near the ocean. We do not have an air conditioner and have gas forced air heating. Your bill might be more or less than mine.

Water, Sewer & Trash Collection

Our water, trash, and sewer runs around $60 a month. We live on an average size lot with grass both in the front and the backyards. We take two showers a day and do several loads of laundry.

Where I live, the trash collection is included in the monthly water bill. In some cities the trash collection is billed separately, or sometimes it's included in your taxes.

Food

Food is abundant and cheap. We have fresh fruits and vegetables year round, at very good prices since most of it is grown in California or nearby Mexico.

Sales Tax

Sales tax is currently 7.75%, but there is no tax on food.

State Income Tax

State income tax varies from zero to 9.3%, using a graduated scale just like Federal taxes.

For 2006, if you're married filing jointly, you hit the maximum rate at $86,934. If your income is more than that, your taxes would be $3,828 plus 9.3% of the amount over $86,934.

For 2006, if you're single, you hit the maximum rate at $43,467. If your income is more than that, your taxes would be $1,914 plus 9.3% of the amount over $43,467.

You can look up the California Tax Rate Schedules by going to www.ftb.ca.gov and typing "Tax Tables" in the search box.

Recreation

In San Diego County, we enjoy the finest climate in the country. In fact, Vista has more days that are 72 degrees than anywhere on the planet! And there's never a rained-out summer picnic. So we do a lot of outdoor activities, and they're all free. We're passionate about the quality of life we enjoy in San Diego and seek to preserve it whenever possible. Even though the area is growing, we still try to maintain plenty of open space and recreational areas. No one wants to see San Diego become another Los Angeles.

Many locals buy a timeshare at the beach to have a resort to go to. You can get one for $6000, rent your week out (they do it for you) and net $600 after paying your maintenance fees. So you're earning 10% a year on your investment. Then you get to use the resort facilities all year for free, as much as you want. When our kids were younger, we would go to the beach, and wash off the sandy body boards in the warm shower. We might take a swim or relax in the Jacuzzi while the kids played ping-pong or pool. Then we would go home with no sandy car or sandy load of laundry. Not a bad deal!

I hope this gives you a better idea of our San Diego lifestyle. If you have any questions, feel free to call me anytime at (800) 469-6391.