San Diego Multifamily Report – November 2024
Construction starts are dropping, too.
San Diego’s multifamily market ended the third quarter on a decelerating path, with advertised asking rents down 0.2 percent, 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 percent in September, outperforming the 94.8 percent U.S. figure.
Unemployment in San Diego stood at 5.0 percent 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 percent expansion over the 12 months ending in July, lagging the U.S. figure by 50 basis points. 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 percent of stock and lagged the U.S. rate by 70 basis points. A 60 percent 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 percent year-over-year volume increase, to a total of $671 million for the first three quarters.
