San Diego Apartment Vacancy Hits 15-Year High as Renters Feel Financial Burden

San Diego's apartment vacancy rate has climbed to its highest level in over 15 years, as supply surges. In 2025, deliveries came in at a 25-year high, outpacing demand by 40%, according to CoStar Group data.

Although elevated deliveries were a factor, concerns about the high cost of living have affected demand and led to widespread use of concessions to stabilize occupancy, Joshua Ohl, director of market analytics for CoStar Group and Apartments.com, told GlobeSt.com.

"Renters by necessity have been among the most financially strained in the region as local inflation and housing costs have outpaced wage growth in recent years," Ohl said.

"More restrictive immigration policies, delayed household formation among younger potential renters, and military deployments have been among the other factors impacting demand."

The overall multifamily vacancy rate was 5.8% at the end of 2025.

Although recent supply additions will offer some relief as rent growth has flattened, vacancy will likely remain elevated through 2026 as affordability remains a pressing concern among households, Ohl forecasted.

Biggest Three-Year Period in Two and a Half Decades

San Diego has begun 2026 with 9,500 market-rate units under construction, following builders breaking ground on 4,000 units in 2025. While that was slightly fewer than the 10-year average in starts, there were nearly 1,000 more units in the construction pipeline than the decade average.

After 4,900 market-rate units were completed in 2024, a 20-year-high of 6,200 units was delivered in 2025. Another 4,800 are scheduled to be completed this year.

While 2026 would see fewer deliveries, the total 16,000 market-rate units would be the most to open in a three-year span in 25 years.

Downtown Construction Pipeline Eases

Particularly, the downtown construction pipeline has eased after being at the forefront of apartment development during the past decade. Fewer than 200 market-rate units opened last year, marking the second-fewest units to open there during a calendar year in the last 10 years.

Approximately 650 units are scheduled for completion this year in Downtown, marking one of the lowest levels in a decade.

New units have piled up in the Balboa Park neighborhoods. Last year, nearly 1,500 units were completed, which was a 20-year high. With another 2,550 units in the construction pipeline, the existing inventory in the Balboa Park neighborhoods is set to expand by another 7.5%.

Developers Focus on Mission Valley, Kearny Mesa

Meanwhile, in Mission Valley and Kearny Mesa, 1,100 market-rate apartments were completed last year – the most since 2021 – and another 2,500 units are under construction. Those units will expand existing inventory by nearly 9%.

Kearny Mesa is poised to see its inventory increase by over 50% with the current construction pipeline. A community plan update supposes a sharp increase in housing, from approximately 4,300 to 26,000 over the next 30 years.

In South County, nearly 1,400 market-rate units were completed in 2025, which was a 20-year high. While those completions largely emptied the construction pipeline in South County, competing lease-ups have pushed vacancy to 7%, 250 basis points above the 10-year average.