by Tom York 2 days ago

The price of an apartment in San Diego appears to be moderating a bit.

Renters here, especially those looking for new places to live, saw continued relief as Realtor.com’s July Rental Report revealed a third consecutive month of declining year-over-year costs for studio, one- and two-bedroom properties.

The drop of 1.0% from July 2022 was driven by an increased rental supply, which follows a national trend, according to the report.

“The rental landscape is showing improvement, with renters in many areas spending less on rent relative to their income,” noted Danielle Hale, chief economist at Realtor.com.

The surge in multi-family construction and rising vacancy rates are anticipated to further suppress rent prices, granting renters more financial stability.

San Diego’s average rent was $3,045 a month in July, which meant that a typical household was paying out 39.1% of their income for shelter compared to 39.3% a year ago.

However, San Diego remained among the less affordable cities, alongside coastal counterparts like Los Angeles, New York and Boston. Conversely, middle-American cities like Oklahoma City emerged as more affordable options.

Average housing costs nationwide consumed 25.9% of gross household income, 14 percentages points less than in San Diego.

Meanwhile, another just-released survey finds that San Diego is a happy place for renters, especially for families.

San Diego is not only an up-and-thriving region but a wonderful place for renter families to live in 2023, as it ranks 23rd among the top 50 best places in the country, according to RentCafe, an apartment rental listing website.

The report found that the city offers a high quality of life — the 6th best nationwide — reflecting its great amenities, weather and culture.

However, San Diego received the least number of points in the housing and the cost-of-living category, giving the metro area a lower overall ranking.

Some other highlights of the study:

• San Diego has emerged as an attractive hub for renting modern apartments, with nearly half situated in prime locations surrounded by amenities and services.
• The region boasts a vibrant and diverse environment that complements the living experience. Furthermore, the area’s educational offerings are commendable, boasting a solid score of 6 out of 7, according to GreatSchools.org.
• The region received a perfect score of seven out of seven for accessibility to natural resources.
• Rental residents here have a median income of $67,484, a reflection of the economic strength within the region.
• With 48% of adult residents holding a bachelor’s degree or higher, our populace boasts an elevated level of education and skill. This underscores the region’s increasing base for innovation and a knowledge-based economy.
• San Diego experiences a robust demand for rental units, boasting an impressive 96% occupancy rate. This indicates a competitive rental landscape, with more than 19 applicants vying for an apartment when it becomes available.
• However, the region’s cost of living presents a steeper picture, standing at 44% higher than the national average. This encompasses various expenses, including groceries and utilities.

Meanwhile, the business of buying and selling hotels and motels is taking a hit.

Alan Reay, CEO at Atlas Hospitality Group, checks in with some interesting news about the market for hotel sales in the Golden State, especially San Diego.

According to his Mid-Year California Hotel Sales Survey, the state suffered its largest decrease in individual hotel sales on record — down 53% — with transactions over $5 Million declining even more at 55%.

Here in Southern California sales were down 59%.

San Diego individual sales were down 48%, while dollar volume was down by 45%. But the medium price per room jumped 52%.

The most expensive sale was the 133-room Pala Mesa Resort in Fallbrook, which sold for $53 million.

Reay blamed the record slowdown on rising interest rates.

He wrote in his report there is a disconnect in the market between seller and buyer expectations. The price that sellers are looking for is not commensurate with what buyers must pay in terms of loan costs.

Foreclosures and defaults are creeping up, and some hotel owners are handing in their keys to noteholders.