San Diego Appraiser Blog

San Diego Apartment Market Update 2020
September 29th, 2020 3:06 PM

Source:  Costar, September, 2020

Even with the Covid-19 turmoil, apartment vacancy in San Diego is not expected to exceed 6%.  In our interviews with apartment managers, they indicate that vacancy and turn over issues are specific to the market area and property, with the coastal areas experiencing minimal if any impact.  The brokerage and lending communities are still adjusting and adapting to the rent control measure that took effect in January of 2020 that limits annual rent increases to 5% plus local inflation (7.2% for San Diego in 2020).  Most apartment sales marketing flyers and offering documents still look to rents on turnover.  While apartment appraisers now must look to upward trended rents and estimate that probable turnover rates for apartment properties.  Apartment construction costs in San Diego County have been ranging from $270.00 to $300.00 per square foot for replacement costs, which means higher apartment insurance premiums or risking being under-insured should anything happen to your property.  Apartment management fees are still ranging from 7% to 8% for most properties.  Apartment management fees have not rolled back despite the substantial rental increases over the past few years. 

Posted by Jennifer L. Chandos on September 29th, 2020 3:06 PMPost a Comment

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