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Market Report

San Diego Multifamily Market Report

2Q 2022

Vacancy Falls to 20-Year Low Amid Homeownership Roadblocks and Near-Term Pipeline Moderation

Demand in larger submarkets outpaces sparse deliveries. San Diego apartment fundamentals are among the strongest in the nation. Spanning the past two years ended in March, 7,200 units were delivered, yet vacancy fell 240 basis points, highlighted by Class B and C vacancy rates falling to 1.1 percent and 0.7 percent, respectively. Additionally, availability in all submarkets but Downtown San Diego is below 2 percent and demand for urban rentals is improving, evident by the 520-basis-point compression registered in the CBD over the past 12 months. The lack of completions downtown this year suggests core vacancy may further compress in the near term. Similar to downtown, the Highway 78 Corridor and East County submarkets, which account for 30 percent of the metro’s rental stock, lack supply additions in 2022, preserving robust demand for existing rentals.
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