State of the San Diego Rental Market
Overall, the market for rental homes and apartments in San Diego is thriving. Vacancy rates remain low, and rental rates are rising year over year but not substantially. If you can say one thing about the rental market in San Diego, it's this: the dynamics are healthy, and the numbers suggest stability in the coming months.
Having said that, the next question is this: how long will this positive trend last? Will rental prices keep rising at the same rate, or will there be a downturn at the beginning of 2022? No one really knows for sure, but if we take a look at crucial housing statistics, the market doesn't appear to be changing any time soon.
So, to give you a better idea of the lay of the land, here are the most vital statistics about rentals to provide San Diego property management professionals a bird's eye view of the market since the start of 2021.
What's the average rent for a home in San Diego?
At the time of this writing, the average rent for a home in San Diego was about $3,000, which is actually twice the national average price to rent a home. Nationwide, the cost of a rental home stands at $1,469.
But this price difference isn't necessarily a bad thing since it reflects the value of the real estate market in San Diego. Like other major cities in California, the cost of living is also higher in San Diego than nationwide, which shouldn't come as a surprise if you sell real estate in the area.
Now let’s compare those figures with the average rent for an apartment in San Diego to paint a clearer picture of what to expect when looking for places to live.
What's the average rent for an apartment in San Diego?
According to RentCafe, the average rent for an apartment in San Diego was about $2,400 for an 876 square-foot unit. The good news is that most of the one-bedroom apartments in the city are approximately this size, but the location of the apartment is really what has a tremendous influence on the price. Some rental rates in San Diego's high-end neighborhoods can exceed $3,000 per month, while others see apartment rental rates as low as $1,000 per month.
For instance, you can expect to pay over $3,000 to rent an apartment in Carmel Valley, Torrey Hills, North City, or Torrey Highlands. Those four neighborhoods have the highest rent prices, but you have other options nearby as well.
Places like 4S Ranch, Bernardo Springs, and Santa Fe Valley offer cheaper rent, around $2,500 per month. An apartment in neighborhoods like Morena, La Playa, and Fleet Ridge runs about $2,000 per month to give you an idea of what the mid-range options look like.
How many people live in residential rental properties in San Diego?
Here’s an interesting fact about San Diego that you may have never read. There’s nearly an even split between the number of rented homes versus the number of homes occupied by owners.
Technically speaking, about 60 percent of households in San Diego are owner-occupied, while about 40 percent live in rented homes. In total, 200,363 homes in the city are rented; owners occupy the remaining 307,217 homes.
Comparing the rental market with the housing market in San Diego
Despite the headwinds of a pandemic that paused the entire economy for almost a year, the housing market nationwide is doing well, which is something you wouldn’t expect. But that’s what the numbers show.
Home prices nationwide are high right now, and price growth is moving along in step at a steady pace - and has been doing so for several years prior to COVID-19, but why? What’s driving the success?
For starters, today's low mortgage rates make it more affordable to borrow money for a home, even if you don't have an excellent credit rating or a sizable downpayment. Not only that, but you can get mortgage rates below the three percent mark if you have excellent credit and at least a 20 percent down payment at the ready.
Another significant influence over the rental market is the fact that more people want to buy homes than the number of available properties for sale. It doesn’t take much of an analysis to see that this dynamic translates into a pretty good seller’s market. Bidding wars are common, and homes are consistently selling above the listing price.
So, what does this mean for rentals in San Diego? In short, the low inventory of homes for sale and high prices means that rental rates will continue to rise in step with the housing market. Depending on a potential homebuyer’s finances, the better course might be to delay buying and keep renting until more homes hit the market.
Either way, San Diego has some of the most expensive properties in Southern California, so that’s another incentive to keep renting for the time being.
Need more advice on San Diego property management?
Overall, that’s what the rental market looks like in San Diego. Apartments are generally more expensive to rent than the national average, and many residences are rented rather than owned outright.
Still curious about what else the San Diego rental market has in store for 2022? We can help!
Contact us anytime to learn more about what makes San Diego such an attractive place to rent properties, whether it be a home or an apartment.
