There has been very significant upward pressure on apartment
rents throughout San Diego County through 2018. San Diego Apartment rental rates have increased
approximately 6%, per year on a compounded basis. Month-to-month apartment tenants typically
pay rents that are approximately 10% higher than a tenant that commits to a
full year lease. Apartment managers have
commenced very high tenant screening standards, are requiring higher deposits,
proof of apartment insurance, annual walk-through inspections, and stricter
lease terms. The high cost of residing in San Diego has caused an increase in
out-migration of some residents. However,
the demand for rentals still far exceeds the supply.
According to Marcus and Millichap, developers are underway
with 7,800 apartments with delivery dates extending into 2021. More than 40 percent of this pipeline will be
finalized in the next three quarters. Most
of these new multi-family projects are high end and near the urban core.