top of page

Apartment Rent Growth Stalls in San Diego

Coastal Neighborhoods See Rents Slip

By Joshua Ohl CoStar Analytics March 3, 2023 | 2:32 P.M.

Annual net absorption, which measures the change in occupancy over time, has turned negative in San Diego’s apartment market during the first quarter for the first time in more than 10 years. The rising cost of affordability has played a key role after rents rose nearly $400 per month, on average, during the past two years.

Among metropolitan areas across the United States with more than 50,000 market-rate apartment units, San Diego’s average monthly rents are the ninth-most expensive, at about $2,350.

After rents rose 0.5% in January, snapping the four-month streak of month-over-month declining rents seen here at the end of 2022, rent growth was only marginal during February, measuring less than 0.1%. That was the lowest rent adjustment for a February since 2015, which had averaged rent growth of 0.5% locally.

On an annualized basis, that would place rent growth on pace to finish 2023 at 3% year-over-year, below the market's long-term average of 3.5%.

Rent growth has averaged 1.4% during first quarter each year since 2015. That includes the 2.4% peak at the beginning of 2022 and the 0% trough in 2020. San Diego will have to post a strong March to reach that level.

Some areas of San Diego fared better in February. Cities along the Interstate-15 corridor in Escondido and San Marcos saw the largest month-over-month increase, at 0.9%. Further south, neighborhoods along Mira Mesa, Rancho Penasquitos and others posted a 0.5% monthly increase to rents.

Conversely, some of the most-expensive coastal neighborhoods recorded the largest monthly rent declines in February. That was led by Coronado and Point Loma, where asking rents fell 1.8%. That dropped average market rents there to $2,300. That is the same average monthly rent as in March 2022.

The University Town Center area, which rests in San Diego’s primary employment node, saw rents drop 1.3% in February to an average of about $3,100 per month. That matches the local rent level from May 2022. With office demand decoupling from apartment demand, that area has seen net absorption fall since the middle of 2022, even with a fresh injection of new inventory from The Jewel at Lux.

The North Shore Cities area, including Del Mar Heights and Carmel Valley in the middle of the strongest employment nodes in San Diego, saw a drop of 1.1% in monthly rents in February to an average of about $3,400 per month.

Although net absorption has tallied roughly 2,400 units in luxury buildings over the past 12 months, that was a 56% drop year over year. While demand is still firmly positive in this class, rents dipped 0.2% in February.

Conversely, with demand falling by more than 1,000 units in mid-tier buildings, rents actually rose marginally by 0.1% during February. That was a hair below the performance in workforce housing, which saw a 0.2% upward adjustment, even as demand has fallen by more than 1,500 units in the past 12 months.

With the spring leasing season on the doorstep and household formation remaining relatively moribund as residents continue to deal with persistent inflation, high rents and high interest rates, the next few months could be an important barometer for rent performance in the San Diego multifamily market for the rest of 2023.

All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner of will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. Keywords: San Diego Commercial Real Estate For Sale, Commercial Property In San Diego, Commercial Real Estate In San Diego, San Diego Investment Real Estate, Commercial Property Management In San Diego, San Diego Commercial Property Management, Commercial Property Management San Diego, Managed Commercial Property San Diego, Commercial Property For Sale San Diego, San Diego Commercial Real Estate Leasing, Top Real Estate Agents in San Diego, Commercial Property in San Diego, Property Management Company San Diego, Real Estate Agent in San Diego, San Diego Commercial Real Estate Real Estate Agent Contact Us Brokerage, Property Management Commercial Real Estate Agency in San Diego San Diego Commercial Property Management

bottom of page