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Cost-of-Living Factors and Fewer
Deliveries Aid Luxury and Mid-Tier Metrics
Supply-side pressure poised to ease downtown. San Diego’s median home price surpassed the $1 million mark last year — a milestone that will limit housing options for a large share of the local populace in 2025. Concurrently, the metro entered this year with sub-5 percent vacancy. Together, these factors will facilitate strong near-term demand for available units across the multifamily spectrum. Higher-earning residents priced out of homeownership will gravitate to Class A and B apartments, which will aid leasing activity at both existing properties and largescale projects slated for completion. Contrasting prior delivery waves, upcoming additions of size are primarily located in the suburbs of San Diego proper, including Mission Valley, Serra Mesa and Linda Vista. As such, the relatively small number of doors slated for Downtown San Diego — potentially less than 500 units — should be well received. This dynamic and positive net absorption in the urban core last year point to CBD vacancy returning to a rate more in line with its prior 10-year mean during 2025. After this year, a construction pullback may extend beyond the CBD, as multifamily permit activity metrowide slowed by nearly 20 percent in 2024.