USC researchers are forecasting that the average rent on an apartment in San Diego County will rise by $155 — to $1,577 — over the next two years in San Diego County.
Pressures on the rental market in San Diego County include the region’s lowest unemployment rate since 2007 and strong population growth, which offset increased construction. According to the report, nearly 6,300 units were authorized by building permits last year, but the vacancy rate is expected to be 4.8 percent, similar to what it is now.
The forecast also looked at the national rental market, which is beginning to cool as more renters become home owners. However, the USC report found that renters in California aren’t able to buy homes as easily. Meanwhile, more people are moving to Southern California, and young adults in the Millennial Generation are entering the rental market. That’s keeping the local rental market strong.
Higher rents mean more profits for real estate investors.
But renters are feeling the cost burden. The Low Income Housing Coalition estimates that nationally, in order to afford a modest, two-bedroom apartment in the U.S., renters need to earn a wage of $19.35 per hour. San Diego Magazine Reports that a renter in Hillcrest received a 60-day notice from the new owner. The rent would increase from $1,200 per month to $3,000.
Lack of inventory is a contributing factor to the escalating rents in San Diego. Many guest houses, cottages, and studios that were formerly available long-term have been converted to short-term vacation rentals.
Today there are total 667 residential rental units listed on the MLS.
Lowest rent is $750 for 300 sq ft Studio in Julian, which is the the smallest unit. The same size studio in Logan Heights is listed for $1,075 and is currently in contract.
There are 562 vacation rental units listed on the MLS.
The smallest unit is a 150 sq ft studio in Normal Heights listed for $2,000 (Rental Min Length: 30days, Vacation Rental Min Length: 5 days).