San Diego Q3 Multifamily Market Insights: After a Steady First Half, Investment Activity Gains Momentum


  • Despite a minimal vacancy increase, apartment operating conditions improved in San Diego during the third quarter. Rent growth recorded its strongest quarter on record, and the annual pace of rent increase reached its highest total in approximately 20 years. Continued recovery in the local labor market should support renter demand in the coming quarters.
  • Vacancy rose 10 basis points in the third quarter, reaching 4.4 percent. The rate is up 40 basis points year over year. Nearly all of the increase is being recorded in the Downtown area; in most other submarkets, vacancy ranges from 2 percent to 4 percent.
  • Asking rents have advanced 8.6 percent year over year, reaching $2,029 per month. The strongest gains were recorded during the third quarter when rents spiked 6.5 percent.
  • Quarterly sales activity has been consistently strong throughout most of 2021, outpacing levels from recent years. Transaction velocity gained momentum during the third quarter. Cap rates have compressed somewhat this year, averaging approximately 3.9 percent, while the median price has reached $296,700 per unit.

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