The Hidden Costs of Staying Put: What San Diego Homeowners Need to Know
In a recent article by Allaire Conte titled "The Hidden Career Costs of Staying in Your Home", published on May 5, 2025, a surprising trend is revealed: low mortgage rates are anchoring homeowners to their properties, even when better career opportunities beckon. This phenomenon, dubbed the new "golden handcuffs," is reshaping how homeowners approach mobility and career growth. For San Diego residents, this trend has unique implications given our vibrant job market and soaring housing costs. Let’s dive into what this means for our local real estate landscape and how buyers and sellers can navigate it.
Summary of the Article’s Key Points
Conte’s article highlights how homeowners with low mortgage rates (often secured between 2020-2022 at around 3%) are reluctant to relocate due to today’s higher rates, which hover around 7%. This rate gap can add thousands to annual housing costs, making moves for better jobs or larger homes financially daunting. The article notes:
Job switchers are seeing smaller pay raises (6-7% for high earners) compared to the Great Resignation’s 20% bumps, reducing the financial incentive to relocate.
Rising home prices and stagnant real wage growth exacerbate affordability challenges, particularly in job-rich but housing-expensive cities.
Some homeowners consider renting out their low-rate homes to maintain equity while renting elsewhere, though this comes with tax, management, and emotional trade-offs.
Employers are responding with relocation support, but these benefits often fall short of bridging the financial gap.
Implications for the San Diego Real Estate Market
San Diego, with its booming tech, biotech, and tourism sectors, is a magnet for career-driven professionals. However, the city’s median home price, which reached $1,025,000 in Q1 2025 (per California Association of Realtors), and tight inventory amplify the challenges outlined in Conte’s article. Homeowners locked into sub-4% mortgages are staying put, reducing listings and keeping supply low. This scarcity drives competition, pushing prices higher and sidelining first-time buyers or those relocating without significant capital.
For current homeowners, the reluctance to sell creates a ripple effect. Fewer move-up buyers (those seeking larger homes) are listing their properties, limiting options for growing families or professionals upsizing to match career advancements. Meanwhile, the rental market is strained as some homeowners opt to rent out their properties rather than sell, but San Diego’s strict short-term rental regulations and high management costs can deter this strategy.
On the career front, San Diego’s job market remains robust, with unemployment at 3.8% in March 2025 (per Bureau of Labor Statistics). Yet, the article’s point about smaller pay raises rings true locally. For example, tech workers switching jobs in San Diego saw median salary increases of just 8% in 2024, down from 15% in 2021 (per local industry reports). This makes it harder to justify trading a low-rate mortgage for a pricier one, even for a promotion.
Supporting Data and Statistics
Mortgage Rate Gap: The Federal Housing Finance Agency reports a 2.5% average difference between existing (3%) and new (7%) mortgage rates, translating to an extra $1,500/month on a $600,000 San Diego loan.
Home Price Trends: San Diego home prices rose 6.2% year-over-year in Q1 2025, outpacing national averages (per CAR).
Inventory Crunch: Active listings in San Diego County dropped to 3,200 in April 2025, a 15% decline from 2024 (per SDAR).
Rental Market Pressure: Median rent for a two-bedroom apartment hit $2,800/month in 2025, up 5% from 2024 (per Zillow).
Practical Advice for San Diego Buyers and Sellers
For Buyers:
Explore New Construction: Builders in areas like Otay Ranch and Eastlake are offering rate buydowns or closing cost credits to offset high interest rates. These incentives can save thousands upfront.
Consider Condos or Townhomes: With single-family homes averaging $1.2M, condos (median $650,000) offer a more accessible entry point, especially in areas like Downtown or University City.
Get Pre-Approved: In a competitive market, pre-approval signals seriousness to sellers. Work with a local lender to lock in the best possible rate.
For Sellers:
Highlight Your Low-Rate Mortgage: If your mortgage is assumable (common with VA or FHA loans), market this to buyers. It’s a rare perk that can set your listing apart.
Price Strategically: With low inventory, well-priced homes in desirable neighborhoods like La Jolla or North Park sell within days. Work with an agent to analyze comps and avoid overpricing.
Explore Renting Options Carefully: If relocating, renting out your home can preserve your low rate, but factor in San Diego’s 4% transient occupancy tax for short-term rentals and potential HOA restrictions.
For Both:
Leverage Remote Work: San Diego’s tech sector offers remote opportunities. If relocating isn’t feasible, explore remote roles to boost income without sacrificing your mortgage rate.
Consult a Local Expert: A San Diego real estate broker can provide tailored strategies, from timing your sale to navigating rate lock programs.
Stay Ahead in San Diego’s Dynamic Market
The “golden handcuffs” of low mortgage rates are reshaping how San Diegans approach homeownership and career moves. Whether you’re a buyer dreaming of a coastal bungalow or a seller weighing a job opportunity, understanding these trends is key to making informed decisions. At Heritage Real Estate, we’re committed to guiding you through this complex market with expert insights and personalized service.
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