“Things are starting to settle down a little bit but they’re definitely trending upward at a pace that’ stronger than we were seeing during the pandemic,” Salviati said.
Nevertheless, Salviati said that “San Diego is continuing to be a really hot market.”
Month-over-month, San Diego rents rose 1.8% from April through May, Apartment List reported.
A year ago, San Diego rents were rising far faster, peaking at a rate of 3.3% in July 2021, Salviati said.
Helping the fuel the increase is a tightening rental market with an overall vacancy rate of 3.1%, down from 3.4% in June 2021, according to Salviati.
This is a dramatic turnaround from what the market was in 2020, when the pandemic was at its height and landlords were offering concessions to lure tenants.
“During the first phase of the pandemic in 2020, starting in the spring, we were actually seeing rents kind of dip slightly,” Salviati said. “That first year of the pandemic there was a broad-based uncertainty on the public health as well as the economy. There was a period there where a lot of folks were kind of giving up their leases.”
That was especially true with younger renters – those in their 20’s and early 30’s - who moved in with their parents.
“That was actually pretty short-lived,” Salviati said. “Over the course of the past year, that was when it really started to reverse itself. We saw new household formation reaching new heights here. We’re seeing more folks wanting to strike out on their own now.”
Rapidly rising housing prices combined with rising interest rates also are putting pressure on the rental market.
With the median price of a single-family house topping $1 million, according to the Greater San Diego Association of Realtors, fewer people can afford to buy so they’re continuing to rent.
Since the start of the pandemic with the lockdown in March 2020, monthly rents in San Diego have increased 24.4%.
Median monthly rents in May were $1,912 for a one-bedroom apartment and $2,464 for a two-bedroom apartment.
As strained as the San Diego rental market may be, San Diego was the only California city to be ranked by RentCafe, another listing service, among the 50 top cities in the nation of the best places to rent, but it came in 50th because of the region’s high cost of living.
The best city to rent in, according to RentCafe, was the Austin, Texas, suburb of Round Rock, with Raleigh, N.C., second.
Most of those that were ranked highest by RentCafe were small cities in the South and Southeast.
San Diego benefits from top schools - rated the third best in the country – natural amenities and a strong local economy, according to RentCafe.