Rental demand paces elevated construction. San Diego County represented a model of consistency over the past five years as rental demand matched supply growth, preserving tight conditions. The metro’s diversified economy, highlighted by a blend of tech firms, research institutes and defense contractors, and a sizable millennial population contributed to the steady absorption of units. Appreciating home prices also played a role, as the gap between the metro average apartment rent and median home payment further boosts rental demand. These drivers will remain in place during 2020, warranting the delivery of more than 4,000 rentals. Approximately 70 percent of these will be built in the city of San Diego, largely spread between downtown and Del Mar Heights. Supply will also be concentrated in Vista and Chula Vista. While construction activity remains elevated for a sixth consecutive year, rapid household formation has buoyed rental demand. These factors will deliver a balanced market, preventing a notable shift in vacancy from occurring.