San Diego’s fundamentals recorded a slow pace in the third quarter, akin to most Western markets, while 2023’s overall performance reflected mixed results for multifamily. A slower economy and a correction of supply pipelines led to most metrics slowing or turning negative. Rates were down 0.1 percent on a trailing three-month basis through September—on par with the U.S. figure—to an average of $2,727. On a year-over-year basis, however, San Diego rents were up 1.9 percent, 110 basis points ahead of the national rate.
Unemployment in the metro reached 4.3 percent as of August, according to preliminary data from the Bureau of Labor Statistics, up 80 basis points year-over-year. Although much slower than the beginning of the year, economic growth maintained its momentum and stood ahead of the U.S. rate. San Diego’s labor pool expanded by nearly 3.0 percent over the 12-month period ending in July, 40 basis points higher than national figures. The city added 39,300 jobs during this period, with gains led by education and health services (15,200 jobs) and leisure and hospitality (12,500 jobs).
Construction activity was diminished from previous years but was still in a healthy spot. San Diego had 11,894 units under construction, with an additional 37,800 in the planning and permitting stages. In line with national trends, transaction volume was down 68.9 percent year-over-year, to $444 million for the first three quarters.
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