San Diego Multifamily Market Report
San Diego’s Extremely Tight Suburban Vacancy Rate Revives Class B/C Investment Activity
Renters flock to lower-cost submarkets. After a historically strong second quarter the metro entered July with its lowest vacancy rate in nearly 20 years, highlighted by the performance of locales outside the city of San Diego. Over the past 12 months ended in June, six submarkets in South County, East County and along the 78 Corridor saw vacancy fall below 2 percent. Each area noted positive absorption in all four quarters, which supported an average annual rent gain of 8 percent. Despite this increase, average monthly rates in these submarkets are $100 to $450 per month below the metro mean. The lower costs of housing will continue to fuel robust demand for available units in these areas, potentially steering renters to more centrally located submarkets where vacancy is higher.