San Diego Multifamily Market Report

Deliveries appear warranted. From a regional and national perspective, San Diego’s multifamily sector entered the second half of 2023 in a favorable position. Through the first six months of this year, the metro was the only Southern California market to register a drop in vacancy. The area is also home to the second-lowest Class A vacancy in the nation and holds claim to the third-tightest Class B and C rates among major U.S. markets. A record job count and median home price here, which exceeded $900,000 in June, are largely to credit for the strong, in-place rental demand. The delivery of more than 3,000 units in the second half, however, will test the metro’s standout rates. Fortunately, completions are relatively well dispersed, suggesting the impact of additions on overall vacancy will be moderate. This enables San Diego to end 2023 with the lowest vacancy among major West Coast markets.