San Diego Multifamily Market Report – June 2024

Rent Growth Improves As Fundamentals Slow

After five months of contractions, San Diego’s rents returned to positive territory, improving 0.2% on a trailing three-month basis through April, but slightly lagging the nation’s 0.3%, according to the latest San Diego multifamily market report. Year-over-year growth clocked in at 0.4%, to $2,705, behind the 0.7% U.S. rate, as noted in the national multifamily market report. In line with national trends, occupancy for stabilized assets dropped 80 basis points, to 96.1% as of March, but remained above the nation’s 94.5%.

The Southern California metro’s economy is showing some signs of improvement, but progress is modest. Unemployment improved 40 basis points since February, to 4.4% as of March, according to preliminary data from the Bureau of Labor Statistics. This was higher than the 3.8% national rate, but below California’s 5.3% figure. Job expansion over the 12 months ending in February stood at 0.9%, amounting to a net gain of 13,600 positions. Education and health services led growth, with 15,000 jobs gained (up 6.3%). A few sectors recorded losses, including professional and business services (-8,900) and manufacturing (-3,200). Multifamily development remained sluggish at best, with only 126 units coming online during the first four months of the year.

During this period, construction began on a single 192-unit property, indicating that developers are prepared to wait for more favorable conditions. Investment paints a similar picture, as only $198 million in deals closed through April.

Read the full Yardi Matrix San Diego Multifamily Market Report: June 2024