San Diego Multifamily Market
Vacancy Falls to 20-Year Low Amid
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, 7,700 units were delivered, yet vacancy fell 240 basis points, highlighted by Class B and C vacancy rates falling to 1.0 percent and 0.5 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 560-basis-point compression registered in the CBD over the past year. The lack of upcoming completions in downtown 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.