San Diego County Rental Market in Flux

As the deepening recession puts pressure on tenants, as well as landlords, a recent survey of San Diego County apartment complexes revealed that rental occupancy is down. Experts say that even though rental rates have remained stable and complexes are loosening just a bit, the overall market is still pretty tight. Sales of downtown San Diego condos are on the rise compared to previous months, however, rentals are not. Other markets in the Southern California area, meanwhile, have been doing even worse as renters who’ve lost their jobs move to more affordable areas or take on roommates to split expenses. One official said that the occupancy rate in the county dropped below 95% compared to almost 98% a year ago. The average rent increased almost 2% to about $1,330. Rent is expected to continue this trend and rise another 1% over the next 2 years. In spite of growing layoffs in the construction industry some sectors of the local economy are actually fairing decently.

One plus is the military bases all over the county because military are commonly renters. Some
have left the rental market and are buying homes due to the lower prices brought on by rampant foreclosures and other factors.

Many analysts have been surprised by how well San Diego County’s rental market has fared, while others say that the county will hold up much better than other regions through the rest of the current recession. Last quarter the average rent for one-bedroom apartments in the county was a little over $1,160, 2-bdrm units averaged $1,415, and 3-bdrms $1,735. The new supply of rental apartments for 2008 was 1,430. Compare that to the forecasted 1,510 for the coming year.

In Los Angeles County the average apartment rental rate fell almost 4% from last year. Orange County saw its first drop in rental rates in thirteen years with the average dropping 2%. In Riverside and San Bernardino counties average rent fell 4% while the occupancy rate fell from just over 95% to just over 91%.