Countywide multifamily vacancy dropped to just 3.72% in September, down from 4.08% six months ago, according to Cushman & Wakefield’s Q3 2018 report on the San Diego multifamily market. At the same time, the countywide multifamily average rental rate in Q3 was $1,960 per month, 5.7% higher than a year ago and 12.4% higher than two years ago. The average rent for units built since 2000 was $2,359, compared to $1,787 for units built before 2000, the report says.
These are the kinds of fundamentals that make investors take notice. Investment sales volume for local apartment properties for $5M and greater surpassed the $1 Billion mark by the end of Q3 2018, according to Cushman & Wakefield. “For the last three consecutive years, total transaction activity has remained above the 16-year long-term annual average of $1.6B,” Cushman & Wakefield Research Director in San Diego Jolanta Campion said. “While it would require a robust fourth quarter to reach that mark here in 2018, it’s still possible.” “I’m optimistic about San Diego apartment fundamentals in the medium term,” MG Properties Group Chief Investment Officer Paul Kaseburg said. “Our economy is well-diversified and seeing healthy growth. “As with many of our markets today, I expect some divergence between the performance of Class-A properties in sub-markets exposed to new supply and more affordable Class-B properties in suburban locations.”