San Diego Q2 Multifamily Market Report: Cap Rates Compress in Active Sales Climate
Highlights:
- Apartment rents in San Diego rose during the second quarter, reflecting the improvement in the overall economy. Hiring should continue in the second half of the year, supporting renter demand as deliveries of new units accelerate.
- Vacancy rose 20 basis points in the second quarter and is up 50 basis points year over year. The rate ended the second quarter at 4.3 percent.
- Asking rents rose 1.8 percent in the second quarter, reaching $1,904 per month. This followed a few periods of rent declines when the local economy slowed in response to the coronavirus outbreak. Year over year, rents are up 0.7 percent, with gains anticipated in the second half.
- Sales velocity cooled a bit during the second quarter, but activity levels in the first half of the year are ahead of the pace recorded in recent years. The median price year to date is $258,100 per unit, while cap rates have dipped to 3.8 percent.
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