Downtown SD Population Grows 10%

Downtown San Diego has the biggest population growth in the greater San Diego market. According to research from JLL, the Downtown population has grown 10% since 2010 with a total of nearly 200,000 residents, while the population in Greater San Diego market has grown 7.9% during the same time. The same research shows that South County has the largest population in the market with nearly 800,000 residents. The South County has also seen significant population growth at a pace of 8.2% since 2010. To find out more about the drivers behind this significant population growth and how it is impacting the real estate market, we sat down with Tony Russell, managing director at JLL, for an exclusive interview.

GlobeSt.com: What is driving the population growth in the Downtown San Diego market?

Tony Russell: In Downtown San Diego, there is so much residential development going on, both for-sale and for-rent product. You are seeing a lot of millennials and generation-X demographics moving into that market. In most major cities, people want to live in a walkable area, and Downtown San Diego offers that lifestyle. Half of the population in Downtown San Diego in millennials and generation-X, and it is driving more of that age group to move into that market.

GlobeSt.com: While the Downtown market is seeing the biggest population growth, South County has the biggest population. Why has that been such a popular market?

Russell: In South County, there is available land for new housing, and in the Chula Vista area, there are major developments under construction, including Otay Ranch, which was 23,000 acres with 27,000 residential units; the East Lake development, which is 3,200 acres with tons of new residential and commercial projects. So, all of the new housing developments are being built in South County. Additionally, South County is the most affordable area in San Diego County. If you are a person wanting to buy a new home. Average home prices in San Diego are $550,000, and in East Lake or Chula Vista, the average price of a new home is going to be $475,000. It is substantially less.

GlobeSt.com: How has the population growth in these markets affected pricing and land values?

Russell: There is no question that prices have been going up dramatically in Downtown and South San Diego County. I specialize in office properties, and we have seen pretty substantial rent growth over the last few years. We expect to see continued rent growth this year. The cost of new construction is high because land values have increased, so in order to justify new development, the rents that developers need to achieve are much higher than you see today. As a result, you are going to see continued rent growth.

GlobeSt.com: What is your outlook for population patterns in San Diego over the next three years?

Russell: I think that you will see continued population growth in San Diego. There is a lot of new single-family homes and multifamily residences under construction, and there is a lot planned. So, you are going to continue to see people flocking into these areas as a result. In markets like Chula Vista, they are re-doing the entire bay front. That is a 525-acre project with a 1,500-room resort and a convention center. That alone is predicted to bring 16,000 jobs to Chula Vista. Over the next few years with all of the development that is planned, more people are going to be moving into the market. That will of course result in more jobs and more people buying houses and renting apartments.