San Diego Quarter 3 Multifamily Market Update

2 Replies

• The San Diego apartment market is amid a stretch of the strongest demand in at least 20 years.
• Overall vacancy rate of 2.4% compares to the stabilized rate of less than 2%.
• With recent demand, asking market rent growth is soaring, to its highest level in 20 years at 12.9%.
• More than half of San Diego submarkets recorded double-digit rent growth and asking market rents have grown by an average of 17% YOY ($2,600/month).
• The current pipeline of 7,300 units will be unlikely to apply much upward pressure on regional vacancy rate.

•Prices are expected to keep pushing upwards as supply and demand remain uneven, with demand far exceeding the supply.

Originally posted by @Christina Labowicz :

• The San Diego apartment market is amid a stretch of the strongest demand in at least 20 years.
• Overall vacancy rate of 2.4% compares to the stabilized rate of less than 2%.
• With recent demand, asking market rent growth is soaring, to its highest level in 20 years at 12.9%.
• More than half of San Diego submarkets recorded double-digit rent growth and asking market rents have grown by an average of 17% YOY ($2,600/month).
• The current pipeline of 7,300 units will be unlikely to apply much upward pressure on regional vacancy rate.

•Prices are expected to keep pushing upwards as supply and demand remain uneven, with demand far exceeding the supply.

With Ca rent control capping rent increases at CPI plus 5%, capped at 10%, for properties over 15 years old, how is the average rent increase so high?  Are the landlords ignoring the rent control regulations?  Are they somehow removing tenants to raise rents?

@Dan Heuschele good question. We have a lot of clients who are still evicting tenants, although on the basis of substantial renovation. It was the strategy before and it's still the strategy, rent control only adds hurtles. 


However, because this data was collected over the past year and we just had the eviction moratorium lifted recently, my hunch is that the majority of the data attributing to this data set are the new asking rents once there is a vacancy. I know of some investors in town paying cash for keys to get to the vacancy, although it's hard to tell if that's happening on a large scale or not. 

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