Forecast of peak rents in San Diego will continue for years – NBC 7 San Diego

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Renting an apartment in San Diego County will get more and more expensive, according to a USC Casden Economics Forecast released Thursday that projects rents will continue to rise over the next two years.

San Diego is expected to have a $250 rent increase by October 2024, surpassing Los Angeles and Orange counties, which are expected to increase by $100 and $184, respectively.

NBC 7’s Amber Frias spoke to San Diegans feeling the pressure.

According to forecasts, San Diego County has a current average rent of $2,334, with a vacancy rate of 2.9%. The average cost of rent is expected to reach $2,582 by 2024, with a vacancy rate of 3.44%.

The USC Lusk Center for Real Estate’s annual report assesses current market conditions and makes two-year projections for multifamily rents and vacant units in Southern California.

Richard Green, director of the Lusk Center, noted that the forecast was somewhat uncertain due to fluctuating inflation, rising interest rates and relocations.

Melina Georghiou, a single mother of three teenagers, paid $42,900 upfront after countless job applications were turned down, NBC 7’s Artie Ojeda reports.

“The Fed has raised interest rates with a frequency not seen since the end of the Reagan administration,” Green said in a statement. “While this may slow inflation, rapid rate hikes could have a different impact on housing in Southern California. A high interest rate may be a barrier to building new housing or deciding of a tenant becoming a landlord. Both add stress to the rental market and drive up prices.”

The report notes that San Diego faces a paradox of significant emigration from the region and yet a declining vacancy rate.

“With a low unemployment rate [3.2%] and incomes above the national average, most emigrants are among those with lower incomes,” the report says. “Forecasts suggest that these vacancies have been absorbed by households with more than one residence. Either way, forecasts call for increases in both rents and vacancy rates over the next two years.”

While the county surpasses Los Angeles and Orange counties in housing construction, it remains near the bottom of the country in new housing stock.

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