San Diego rents dip for first time since 2010, new data shows

New data shows the San Diego rental market is ending the year on a downward trend when it comes to pricing. It’s the first annual decline in 15 years, according to CoStar.

The commercial real estate data firm reports rents have fallen month over month for the past six months across the region, signaling a shift after more than a decade of rising prices. Josh Ohl, senior director of market analytics for CoStar Group San Diego, said the data focuses on properties with five units or more and covers about 289,000 units across the county.

“With the past three months alone, each [recorded] the same negative 0.4% rent growth,” Ohl said. “So this is the first time on an annualized basis that rents have fallen since 2010.”

Vacancy rates are also climbing. Ohl said vacancies rose from a low of 2.7% at the end of 2021 to 5.9%, which is the highest level seen in 15 years.

However, some landlords say the broader data does not reflect their individual experiences.

Rob Brown, a broker with Fantastic Realty, owns 17 apartment units in San Diego, including properties in Pacific Beach, Mission Beach and Cardiff-by-the-Sea. He said that while large, newer apartment buildings, especially in downtown San Diego, are taking longer to fill and more concessions are needing to be made, smaller beach-area properties remain more competitive in his experience.

“It’s two to three weeks to rent an apartment out instead of like 50 people in two days like in the pandemic,” Brown said. “But it’s not as bad as those articles make it seem by the beach.”

Lucinda Lilley, founder and CEO of Bridging Influence who has been in the rental industry in Southern California since 1986, said the market is softening overall, as it has been for months, and encouraged communication between landlords and tenants as conditions change.

“If a renter is looking to renew their lease, communicate with the landlord and say, ‘Hey, look, I know you’re trying to raise my rent, but I’m looking, and I see the market doesn’t really bear that. Are you willing to negotiate with me?’” Lilley said.

Lilley added that landlords are also being advised to negotiate renewals to avoid extended vacancies.

“We’re even at a point of recommending to our clients to negotiate lease renewals because when vacancies do happen, they are sitting longer because there’s more product competing for the business,” Lilley said.

Looking ahead to 2026, Ohl said he does not expect significant changes and believes the current trends will continue into next year. According to CoStar data, downtown San Diego currently has the highest vacancy rate in the county, at just over 10%.

This story was originally reported for broadcast by NBC San Diego. AI tools helped convert the story to a digital article, and an NBC San Diego journalist edited the article for publication.