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.
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.
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 demand, with apartments for rent in San Diego 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.