Asking Rents Contract, Investment Improves
San Diego’s multifamily market ended the third quarter on a decelerating path, with advertised asking rents down 0.2%, on a trailing three-month basis through September, to $2,728. The national average remained unchanged for the quarter, at $1,750. The metro’s occupancy declined 40 basis points year-over-year, to 96.1% in September, outperforming the 94.8% U.S. figure, according to the latest San Diego multifamily market report.
Unemployment in San Diego stood at 5.0% in August, according to preliminary data from the Bureau of Labor Statistics. This was the highest figure since October 2021. Job gains slowed down, to a 0.8% expansion over the 12 months ending in July, lagging the U.S. figure by 50 basis points, as noted in the national multifamily market report. This represented a net gain of 13,500 jobs, with education and health services (12,900 jobs) and government (5,500) leading growth. Professional and business services (-4,500) and manufacturing (-3,700) recorded significant losses.
San Diego developers completed 2,977 units year-to-date through September, which represented 1.4% of stock and lagged the U.S. rate by 70 basis points. A 60% year-over-year drop in construction starts confirmed the slowdown in activity, a trend present across most markets. However, multifamily demand remained steady. Meanwhile, transactions recorded a 25% year-over-year volume increase, to a total of $671 million for the first three quarters.
Read the full Yardi Matrix San Diego Multifamily Market Report: November 2024
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