29 Jun L.A. and San Diego outperform the national average
San Diego’s occupancy increased 90 basis points over the past 12 months while within the last year the rent growth rose 20.8%, which outperformed the national average. 2021 was a record year with $3.7 billion traded in multifamily assets. With this, the first 4 months of 2022 have had a volume of $731 million, which is on par with last year. But only 911 apartments have been seen online while only another 8,445 units have been underway since the beginning of Q2, falling well short of the current demand (as seen by the graph below), which thus can increase pricing as well.
Rents went up 1.3% on a 3-month basis to $2,537 as of April for San Diego. Year over year San Diego rents rose 20.8% while the national average was 14.3%. The demand for lifestyle rates increased another 1.3% as well and the working-class renter by necessity demand also rose another 1.4% this year.
San Diego’s unemployment dropped to 3.4%, outperforming California (4.9%) and the nation (3.6%). San Diego since February has added 104,300 jobs, a 7.4% expansion compared to the national 4.7%. This is causing San Diego to be able to have a larger increase in price per unit while having people readily available to pay those high prices as seen by the chart below.
“All 32 San Diego submarkets tracked by Yardi
Matrix recorded double-digit growth in the 12
months ending in April, with half of them registering
gains above 20.0%. University (42.4% to
$3,239), Coastal (28.8% to $2,894) and Del Mar
(27.2% to $3,713) led the way.”
“The metro’s economic profile helped it bounce
back faster than many coastal cities, with San
Diego staples such as its naval base and academic
institutions and its status as a biotech hub
anchoring the recovery. Leisure and hospitality
also came roaring back, with the lifting of pandemic
restrictions. San Diego added 104,300 jobs
in the 12 months ending in February, marking a
7.4% expansion, above the 4.7% U.S. figure. More
than half of gains were in the leisure and hospitality
sector (52,700 jobs), followed by professional
and business services (21,100) and government
(10,100). While all sectors registered expansions,
information (500), manufacturing (400) and financial
activities (200) recorded only slight gains.”
“In line with most coastal metros,
San Diego’s population shrunk in
2021, contracting by 11,183 people.”
“A total of $731 million in multifamily assets
traded across San Diego in the first four months
of 2022, above the $405 million recorded during
the same time last year. The 2022 figure comes
on the heels of San Diego’s best year for transactions,
with a record $3.7 billion in multifamily
properties changing hands in 2021.”
Matrix Multifamily San Diego Report-June 2022
Source: https://www.yardimatrix.com/publications/download/file/2391-MatrixMultifamilySanDiegoReport-June2022?utm_source=WhatCountsEmail&utm_medium=Yardi%20Matrix%20Rental%20Market%20-%20Multifamily%20OutlookSouthern%20CA%20Metro&utm_campaign=062822_Matrix_MF_Metros_LA_SD_17330