New units drive up rental vacancies in San Diego

Average rent is $1,514, up from $1,260 a year ago
SAN DIEGO (June 3, 2015) - The countywide vacancy rate for residential rental units now stands at 4.1 percent, a slight increase from Fall 2014, according to the San Diego County Apartment Association’s (SDCAA) Spring 2015 Vacancy and Rental Rate Survey. The vacancy rate — up from 2.3 percent last fall and 2.7 percent this time last year — was driven higher in part by rising supply from newly constructed units entering the local market. In Mission Valley, for example, the first phase of a 612-unit apartment community opened early this year. Other communities, in San Marcos, Kearny Mesa, Downtown and elsewhere, also have opened recently.  Multiple military deployments early in 2015 may also have contributed to a higher vacancy rate.

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“While our growing economy is keeping demand strong, we are now seeing a better balance between supply and demand,” said SDCAA Executive Director Alan Pentico. “With many new units still in the development pipeline, we expect to see supply continue to rise. This is essential as we strive to make up for the many years when the region was not developing enough to meet demand.”
In the city of San Diego, the vacancy rate is 4.2 percent, up from 2.2 percent last fall and 2.7 percent this time last year. The South Bay region had the highest vacancy rate, at 5.1 percent, up from 2.4 percent in the last survey. East County had the next highest vacancy rate, at 4.7 percent, up from 2.3 percent last fall. North County’s vacancy rate was 3.8 percent, up from 2.5 percent last fall.
Among specific unit types, studios had the lowest vacancy rate, at 2.8 percent. One-bedroom units had a vacancy rate of 4.4 percent; two-bedroom units had a vacancy rate of 4 percent; three-bedroom units had a vacancy rate of 4.1 percent.
The survey found the weighted average rent across all units types in the county was $1,514. That’s up from the Fall 2014 survey, which showed a weighted average rent of $1,321, and from the Spring 2014 survey, which showed a weighted average rent of $1,260.
“We still have pent-up demand, despite the modest vacancy increase, and that is reflected in rising rents,” Pentico said.
Average rent was $974 for studio units; $1,301 for one-bedroom units; $1,609 for two-bedroom units; and $1,943 for units with three or more bedrooms. Because response levels varied in certain ZIP codes, it was not possible to draw clear conclusions about the overall direction of change in rent levels. However, many new units are considered high-end and many existing properties are undergoing renovations as they turnover – work that often was delayed during the Great Recession.
About the survey: The SDCAA Vacancy and Rental Rate survey is conducted twice a year to provide a snapshot — not a scientific study — of industry conditions. The Spring 2015 survey was mailed in March to nearly 6,000 rental property owners and managers in San Diego County. To ensure the results reflect the diversity of rental housing in the county, surveys are mailed to properties of all sizes, ages and amenity levels. The responses SDCAA received in this survey period represent 18,314 rental units. Because survey response rates fluctuate over time, comparisons between survey periods do not necessarily reflect the performance of a particular sample of rental units over time.
About SDCAA: The San Diego County Apartment Association is a non-profit organization that has served the rental housing industry since 1919. SDCAA’s 2,200 members are rental property owners, rental property managers and suppliers of goods and services to the rental housing industry. The overall improvement of the rental housing industry is a primary focus of SDCAA, which represents single-family rental homes to the largest multi-family rental communities. SDCAA provides a wide range of services to its members, including legislative advocacy, education and resident screening. You can follow SDCAA on Twitter and Facebook.
Contacts:
Molly Kirkland 858.751.2200 [email protected]
Tony Manolatos | [email protected] | 619-549-0137