RENTS SET RECORD

San Diego County rental prices have steadily risen throughout much of the pandemic, but may have hit a peak as some communities are starting to see a slowdown in increases

San Diego rent is now the highest it’s ever been and, despite a slowdown from pandemic highs, continues to increase.

The average rent in the county was $2,417 a month at the start of June, said real estate tracker Costar. That’s the highest ever recorded for San Diego County and represents a 3.4 percent increase in a year.

It’s a far cry from this time last year when rents were up 13.2 percent annually, but that might not be much comfort to San Diego renters. While increases started to slow in late summer, it was never enough for renters to actually see any decreases in price.

Joshua Ohl, a managing analyst at Costar, said San Diego’s rent is still increasing faster than many other cities across the United States. Yet he said shifts in the economy have finally started to change what landlords think they can charge here and across the country.

“There was a shift among renters that took hold around August and September where renters just put their foot down,” he said. “The rapid rise was unsustainable.”

Ohl said their research showed a lot of renters were trying to cut costs by moving out of a two-bedroom apartment to a one-bedroom to save money or moving out of an upgraded unit in a building to an older one that typically rents for less.

He said higher interest rates often affect renters in other ways than just preventing them from buying a home so they can get out of the rental market. Ohl said many renters are likely to face higher interest rates with credit cards and car loans. Plus, like everyone else, they are feeling the pinch of inflation as everything from food to clothing costs more.

“There are these daily reminders that everything is just a little more expensive,” he said. “Landlords are recognizing that is the case and adjusting expectations.”

Costar, using its database of 273,549 units, said the average price for a studio was $1,851 a month; for a one-bedroom, $2,129; for a two-bedroom, $2,598; and three-bedroom, $3,286.

Vacancy rates remain low, making it hard to find an apartment even if a renter is willing to pay the higher prices. The vacancy rate was 3.5 percent to start June, which is better than the low of 2.5 percent in 2021 during the pandemic when more people were working from home. The rise in the vacancy rate today is driven by several large downtown complexes opening at the same time.