Future is Strong for San Diego Multifamily

SAN DIEGO-Competitive. That’s the best description for investor demand for core San Diego multifamily assets today. Although growth expectations are beginning to temper nationally, rent growth in the San Diego region is expected to pick up the pace over the next few years, at a rate of 3% to 5% annually through 2017. At the same time, vacancy is expected to be as low as 2% to 3% in strong submarkets, and averages less than 5% countywide. It’s a great time to be a multifamily investor in San Diego as the market continues to enjoy steady job growth, consistent low supply, and coveted demographics.

San Diego is home to a large population of millennials, nearly a quarter of the overall population, and is home to the fifth largest population of millennials in the country. San Diego also suffers – or benefits, depending on how you look at it—from continued supply constraints. Although there are 1,500-3,500 units coming online annually from now until 2017, this is a mere 1% to 2% of the total multifamily inventory. At the same time, there is increasing competition on the horizon from condominium developers.