San Diego’s apartment development remains robust, with over 1,000 market-rate units starting construction in Q2 2024. Over the past year, more than 4,500 new units have broken ground, nearly 2,000 more than the previous year, aligning with the five-year average. Nearly 7,700 units are currently under construction.
In the first half of 2024, 1,800 units started construction, a 20% increase from the same period in 2023, despite rising debt costs and slower demand. Developers are hopeful that future completions will align with a more stable market.
Major projects like the Midway District update and Midway Rising are advancing, with potential to add thousands of new units. Updates across various areas, including Mission Valley, could allow for over 100,000 additional units in the next decade, though neighborhood opposition and delays may affect actual build-out.
Challenges include Hines halting the $4 billion Riverwalk community project in Mission Valley due to rising costs, delaying the initial phase to 2026.
In the first half of 2024, nearly 2,200 market-rate units were completed, with another 1,100 expected by year-end. Although this is the lowest total since 2020, it is expected to meet demand and keep vacancy rates above 5%.
SOURCE: CoStar Analytics
