The average apartment rental rates in San Diego County have continued to increase, as vacancies decline.
Locally based MarketPointe Realty Advisors reported the average rental rate climbed by 4.6 percent between March and September to reach $1,515 per month.
"The rents are going up and the vacancies are going down," said Russell Valone, MarketPointe president.
The one new complex that opened for rent during the past six months was Sunroad Enterprises' 126 unit Ariva development in the San Diego Spectrum in Kearny Mesa.
A total of 69 units were leased by the time of MarketPointe's survey earlier this month. The average rent was $2,140 and the lease rates ranged from $1,595 to $2,745 per month.
The North County Coastal area and downtown San Diego have generally vied for the most-expensive rental market.
The San Diego Central submarket's downtown portion commands a slight premium over the North County Coastal submarket, with an average rental rate of $2,016 per month (or $2.49 per-square-foot) for an 811-square-foot unit.
North County Coastal, with a weighted average rent of $1,868 per month for 945 average square feet of living space ($1.98 per square foot), was 23 percent higher than the county average.
The county's overall vacancy rate, which had exceeded 4 percent for many years, saw that level dip below to 3.59 percent as of this month.
A 5 percent level is considered the standard for an apartment market in balance.
None of the submarkets had vacancies that even reached 5 percent at the second quarter's end.
The Central San Diego market had the highest rate at 4.8 percent. The lowest rate was along the Highway 78 Corridor at 2.54 percent.
MarketPointe, which limits its surveys to properties with 25 or more units, counted a total of 127,678 units -- of which 123,088 were leased and 4,590 were vacant.
The research firm contends that despite some 3,440 units of 10 projects under construction -- which are exptected to open by early 2015 -- and high rents, there should be little trouble absorbing the units.
"Some projects, both condominium conversions and newly constructed units, entered the rental market after unsuccessful sales programs were discontinued," MarketPointe added. "Despite the well above average rental rates among newer projects, new units continue to lease quickly, demonstrating the strong demand for new rental housing."
MarketPointe said vacancy rates will continue to be pushed downward by an improving for-sale housing market and that formerly distressed single-family homes, temporarily occupied as rentals, are now selling once again.
"A lot of renters went into the foreclosed houses, but now, as these houses are back on the market, people are buying them and I'm not talking investors here," Valone continued.
An examination of the 127,678 units in MarketPointe's survey found that 53 percent of the units have two bedrooms, 35 percent are one-bedroom floor plans and three-bedroom units account for less than 8 percent of the supply.
The studio apartment accounted for just 3.57 percent of the supply.
While a total of 30,078 new multifamily rental units were added to the San Diego County market since 1998 until this month, the figure is less than that because of condominium conversions.
Some 12,299 units contained, within 59 projects, have been identified as future market rate rental housing developments in San Diego County.
The San Diego Central submarket will be the most active submarket with 6,279 units in the entitlement process. The East County and Highway 78 Corridor submarkets each have fewer than 1,000 units in the pipeline.
Valone said with high land and construction costs, all of these market-rate apartments will be of the luxury variety.
Valone added that a whole new wave of condominium conversions may be just around the corner: "We could even see conversions within the next year."
9201 Spectrum Center Blvd.
San Diego, CA 92123
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