SAN DIEGO — According to a recent research, San Diego emerged from the busiest time of year for renting apartments and for the first time in a long while as the most competitive rental market in Southern California.
The nation’s hottest rental locations from April to June of this year were identified by RentCafe, a real estate website, through the analysis of data from over 130 areas nationwide, including vacancy rates and the number of applicants for the same property.
Between the peak season of last year and this year, nationwide competitiveness decreased, with over half of the markets assessed seeing a “cooldown.” The report attributes this trend to the rise in new apartment construction and the pandemic’s residual economic consequences.
In the meantime, San Diego became more competitive in the rental market, outpacing Orange County for the first time in the previous two years. Out of all the metros examined this year, the two regions had the busiest markets, ranking 18th and 19th, respectively.
The paper claims that the significant housing scarcity in the metro area, along with rapid population growth, is a major factor contributing to the increased competition.
In San Diego, around 96% of the apartments are occupied, meaning that 17 renters are in competition for each open unit. These accessible units are typically only available for 33 days, or slightly more than a month, before someone moves in.
A portion of the reason for this shortfall is the restricted amount of land available for future development, which makes new building difficult. Only approximately 0.2% of all the units occupied during this year’s peak season were brand-new, according to the research.
By 2029, it’s predicted that the city alone would need to construct over 108,000 new housing units in order to meet the demand for housing.
Conversely, Orange County experienced a slight increase in newly constructed buildings during the peak season of 2022 and 2023, but not enough to increase the options available to tenants in the area.
Because of the county’s around 95.7% occupancy rate, roughly 61% of renters choose to remain in their homes during the busiest rental season. According to the survey, it takes approximately forty days to fill a vacancy for those available rentals, with thirteen potential tenants competing for the same unit.
Next, based on five metrics—apartment occupancy rate, average total days vacant, prospective tenants per vacant unit, renewal lease rate, share of new apartments completed within the same timeframe, and their averages for April to June—the markets were ranked according to their market competition score.