Many buyers think they are ready to buy a $750,000 condo in downtown San Diego until you calculate the true monthly costs. The mortgage payment was $4,200, but when you add HOA fees, property taxes, insurance, and maintenance reserves, the real monthly commitment jumps to $5,400. That $1,200 difference changed everything about what they thought they could afford and where they need to focus their search.

I've seen too many buyers get shocked by the hidden costs after they've already fallen in love with a property which is why having a real conversation about what you can afford, and having open conversations with your real estate professional are so important.

Understanding the true cost of homeownership in San Diego means looking beyond the mortgage payment and calculating what matters most based on your priorities and financial situation.

1. Property Taxes: San Diego's Reality

San Diego County property taxes average around 1.25% annually of your home's assessed value, but this varies by area and special assessments. On a $750,000 home, that's roughly $9,375 per year or $780 monthly. Many buyers underestimate this cost because they're focused on the mortgage pre-approval amount. Remember, property taxes can increase over time, and new construction areas often carry additional Mello-Roos taxes that can add hundreds more per month.

2. HOA Fees: What You're Really Paying For

HOA fees in San Diego range from $200 monthly for basic townhome communities to over $800 monthly for luxury high-rises with full amenities. But the monthly fee is just the beginning. You need to review the HOA's financial health, upcoming special assessments, and what's actually covered. Some HOAs include utilities, insurance, and major maintenance, while others barely cover landscaping. The difference in value can be substantial, and a financially unstable HOA can hit you with surprise assessments of thousands of dollars.

3. Insurance Costs: More Complex Than You Think

Homeowner's insurance in San Diego typically runs $1,200 to $2,000 annually for standard coverage, but coastal properties, fire-prone areas, or homes over certain values require specialized coverage that costs significantly more. If you're buying a condo, you'll need HO6 insurance that works with the master policy, and understanding the coverage gaps is crucial. Flood insurance isn't typically required in most of San Diego, but earthquake insurance is worth considering given our location.

4. Maintenance and Repair Reserves

The general rule is to budget 1-3% of your home's value annually for maintenance and repairs, but in San Diego's climate and with our housing stock, I recommend planning for the higher end. On a $750,000 home, that's $15,000-$22,500 per year you should be setting aside. [For a detailed breakdown of maintenance costs as a percentage of your home's value and ideas on how to plan for repairs, check out this article]. This isn't just for major repairs—it includes everything from HVAC servicing to exterior painting, which costs more in our coastal environment.

5. Prioritizing Based on What Matters to You

The reality is, every buyer has different priorities and financial situations. Some buyers prioritize low HOA fees and don't mind higher maintenance responsibilities. Others want full-service buildings with amenities and are willing to pay premium HOA fees for that lifestyle. The key is calculating all costs upfront and making decisions based on your actual priorities, not just the lowest monthly payment. Consider your time, skills, and long-term financial goals when evaluating the true cost structure.

Making Informed Decisions

The true cost of homeownership extends far beyond your mortgage payment, and in San Diego's market, these additional costs can significantly impact your budget and lifestyle. The buyers who succeed are those who calculate everything upfront, understand what they're paying for, and make strategic decisions based on their priorities. Don't let hidden costs derail your homeownership goals—plan for them, budget accordingly, and choose properties that align with your total financial picture.

Here at Hanna Bederson Homes, we partner with some of the best lenders in California to maximize your ability to purchase and find a home that fits for you.