It’s no secret that major metro areas in California are among the hottest rental markets in the country right now. As we move into 2019, the San Diego rental market is a prime example of a market performing at its peak. Not only is rental demand soaring, but Business Insider recently ranked San Diego as the fifth-best best rental market in the nation.
So, let’s take a look at why the San Diego rental market is so hot as we head into the colder winter months.
1. Rents Are on the Rise
The rental market has been fairly consistent in California, with the Bay Area and San Diego specifically growing by leaps and bounds. San Diego rents have risen to an average of $2,028 per month, marking a 3% increase from last year’s average of $1,963 per month, according to a recent report from Apartment List. For a more specific breakdown, the average rent for a studio apartment in the region stands at $1,479 per month. Monthly rent for a 1-, 2- and 3 bedroom apartment in San Diego is $1,793; $2,190 and $2,773 respectively. As rental rates continue to rise, this is a trend property owners and renters will want to keep an eye on now and in the near future.
2. Vintage Apartments Growing in Demand
What’s old is new again, or at least a hot trend right now in San Diego. Logic says that older rental properties, many containing more outdated amenities and features, would be less desirable than newly built properties. It would also seem that these buildings should come with a lower rents. However, that’s not quite true – at least in San Diego.
Older rentals, or vintage buildings, have commanded higher rents in recent months. In fact, rental rates for these properties are outpacing rents for new construction. Studies show that rents for units built prior to 1960 increased more than 20% in 2018. Rents for units built in the 1990s also rose 6.5%, according to a study by Apartment List. Moving into the New Year, we will keep an eye on this trend.
3. Smart Tenants Want Smart Home Amenities
Millennials currently rank as the most dominant renter cohort, while the younger Generation Z has also started to enter the rental market in high numbers. Both generations are known for their tech savvy and interest. Real estate investors and property managers that offer smarter amenities during the leasing process, such as online videos and virtual property tours, appeal to these younger renters. Moreover, rentals with amenities like high-speed WiFi, smart locks, smart thermostats and more.
4. Seniors Emerge as a Growing Renter Cohort
One of the most surprising trends in San Diego is the increase in rental demand among seniors. High demand among the 55+ cohort exists in areas like downtown San Diego. Locations in the region with high walkability scores and activity ratings are especially popular. People are living longer than ever, so building owners should keep the variety in age ranges and the specific needs of these various renter cohorts in mind when leasing rental properties. Generally speaking, seniors prefer hands-on customer service over virtual tours, smart home amenities, and other high-tech features.