San Diego Multifamily Investment Forecast
Economic Improvement and Record Home Prices Extend Stretch of Extremely Sparse Vacancy
Three-pronged job growth fuels demand across tiers. Net absorption in San Diego County last year nearly doubled a two-decade high volume of unit deliveries. This performance has placed the metro among the least vacant markets in the nation heading into 2022 with several factors poised to maintain this standing. The local biotech sector continues to expand this year, evident by the number of projects that are transforming office and warehouse properties into life science facilities. While many employees in this industry earn a high wage, homeownership may be out of reach as the area's median home price surpasses $900,000 this year. Class A rentals will benefit as the number of units slated for delivery falls below the prior five-year average. Elsewhere, a rebound in tourism should boost leisure and hospitality hiring, with industrial growth near the U.S.-Mexico border driving trade, transportation and utilities-related job creation. Together, growth of these sectors preserves what is already robust Class B and C demand.