San Diego Multifamily Report – Summer 2019

The metro's life sciences cluster and thriving tech sector continue to support job growth and create demand for housing.
San Diego rent evolution, click to enlarge
San Diego rent evolution, click to enlarge

Multifamily demand in San Diego remained robust in the first half of 2019, sustained by population gains, household formation and steady hiring in well-paying industries. An innovation powerhouse, the metro continues to draw a talented workforce from local universities as well as from outside the city.

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Employment growth in the 12 months ending in May was led by education and health services (8,700 jobs), followed by professional and business ser­vices (7,000 jobs). San Diego’s life sciences cluster, one of the largest in the nation, is a key driver behind the region’s economic growth, along with its thriving tech sector, which continues to diversify in fields such as autono­mous driving, data analytics and robotics, while luring in Millennials at a high rate and contributing to the area’s positive net migration.

San Diego sales volume and number of properties sold, click to enlarge
San Diego sales volume and number of properties sold, click to enlarge

Drawn by the market’s stability and prospects for higher rents in the con­text of limited supply, multifamily investors pushed the average price per unit to $359,375 in the first half of 2019. Despite strong apartment de­mand, with rentals remaining the primary housing option for many aver­age earners, strict zoning and land-use regulations have been keeping the metro’s annual new supply below 2.0 percent of total stock for the better part of this cycle. We expect 3,648 units to come online this year.

Read the full Yardi Matrix report.