August 8, 2022

San Diego Q2 Multifamily Market Report: Vacancy creeps lower, rents maintain upward momentum

Highlights:

The San Diego multifamily market continued to strengthen during the second quarter, as asking rents pushed higher and the vacancy rate tightened. Multifamily developers are moving more projects into the construction pipeline, with nearly 5,900 units currently under construction.
The local vacancy rate dropped 30 basis points during the second quarter, finishing the period at 3.7 percent. Year over year, the rate has improved by 60 basis points. Vacancy has declined in each of the past three quarters.
San Diego apartment rents have recorded rapid gains in recent periods although the pace of growth slowed in the second quarter. In the past three months, asking rents increased by 2.2 percent to $2,275 per month. Asking rents have spiked by 19.5 percent during the past 12 months.
The multifamily investment market gained momentum in the second quarter with sales activity accelerating from the start of the year. The median sales price thus far in 2022 rose to $357,000 per unit, up 11 percent from 2021 levels. Cap rates inched higher, averaging around 3.5 percent during the second quarter.