San Diego Rental Vacancy Rate (San Jose, Needles: real estate, 2014, apartment complexes)

[kettlepot]

News article in the Hartford Courant about apartment rental vacancy rates in US metro areas.

New Haven is the tightest market with a 2.2% vacancy rate, hence the placement of the story in the Hartford newspaper. However, according to the survey the second tightest market is not San Jose at 2.7% but San Diego at 2.6%.

Report: New Haven Tightest U.S. Rental Market - Courant.com

I'm not out in the rental market so I don't know from experience, but when I was looking for rentals back in the day, and that day was the time of a strong economy, I never had a problem finding a rental.

If you are a prospective renter, are you having problems?

Anecdotally, I know that when it comes to financing construction, loans for rental housing are reasonably easy to come by, while housing for condominiums is still dicey.

Finally, if you know of data the would indicate the survey above is bogus, that would be interesting to read about as well.

[oddstray]

Here: Local rental market remains strong, according to San Diego County Apartment Association survey - ScoopSanDiego.com | Mission Valley News: Local News

This article, from 12/4/13, says the vacancy rate is 4%. I wonder how much it matters which rentals you include or exclude from a survey. This article specifically mentions studios, 1-br, 2-br, and 3 br. But it doesn't mention SFHs.

[shmoov_groovzsd]

Interesting post. Thanks for sharing.

I am really curious about this too. Oddstray makes a good point regarding sfh rentals or what this report really qualifies as a rental. such as only apartment complexes vs someone posting a for rent sign up in a window.

[mysticaltyger]

Originally Posted by kettlepot

News article in the Hartford Courant about apartment rental vacancy rates in US metro areas.

New Haven is the tightest market with a 2.2% vacancy rate, hence the placement of the story in the Hartford newspaper. However, according to the survey the second tightest market is not San Jose at 2.7% but San Diego at 2.6%.

Report: New Haven Tightest U.S. Rental Market - Courant.com

I'm not out in the rental market so I don't know from experience, but when I was looking for rentals back in the day, and that day was the time of a strong economy, I never had a problem finding a rental.

If you are a prospective renter, are you having problems?

Anecdotally, I know that when it comes to financing construction, loans for rental housing are reasonably easy to come by, while housing for condominiums is still dicey.

Finally, if you know of data the would indicate the survey above is bogus, that would be interesting to read about as well.

I can assure you San Jose's rental market is very tight and rents are high.

[mysticaltyger]

Originally Posted by oddstray

Here: Local rental market remains strong, according to San Diego County Apartment Association survey - ScoopSanDiego.com | Mission Valley News: Local News

This article, from 12/4/13, says the vacancy rate is 4%. I wonder how much it matters which rentals you include or exclude from a survey. This article specifically mentions studios, 1-br, 2-br, and 3 br. But it doesn't mention SFHs.

Those articles usually include apartment buildings but not single family homes.

[earlyretirement]

I was at a real estate conference last night and I met Stan Humphris (Zillow's Chief Economist and creator of the Zestimate) as well as Gary London, who is probably one of the most respected economists in San Diego (who incidentally was very very accurate on the housing recovery).

Both say rental prices and housing are heading up this year in San Diego. In fact, it was interesting to hear Gary's SUPER bullish perspective on housing. He says he sees 2014 as the best year for housing. I don't agree that 2014 will be better than 2013 for San Diego housing which was amazing!

Dr. Humphris predicted 7% increase in prices for San Diego which I think is more in line but both say rental prices are heading up.

[kettlepot]

Originally Posted by earlyretirement

I was at a real estate conference last night and I met Stan Humphris (Zillow's Chief Economist and creator of the Zestimate) as well as Gary London, who is probably one of the most respected economists in San Diego (who incidentally was very very accurate on the housing recovery).

Both say rental prices and housing are heading up this year in San Diego. In fact, it was interesting to hear Gary's SUPER bullish perspective on housing. He says he sees 2014 as the best year for housing. I don't agree that 2014 will be better than 2013 for San Diego housing which was amazing!

Dr. Humphris predicted 7% increase in prices for San Diego which I think is more in line but both say rental prices are heading up.

Saying 2014 will exceed even in 2013 is going out on pretty thin limb. I agree with you Early, I don't see that happening.

I'm trying to get a handle on what is driving the household formations:

Job growth is still anemic in San Diego.
Population growth? But it's not growing that quickly, sub 1%.
Twenty-somethings who had holed up in their parents basements for the past 5 years surging out into the world saying to their parents, "I'm outta here!"?

Needless to say there was a dearth of constructions for several years, but also during that period a lot of single family homes got turned into rentals creating supply that way.

Well, I'll still be interested if we here from non-particular renters saying they can find an apartment. Finicky people always have problems finding rentals.

[earlyretirement]

Originally Posted by kettlepot

Saying 2014 will exceed even in 2013 is going out on pretty thin limb. I agree with you Early, I don't see that happening.

I'm trying to get a handle on what is driving the household formations:

Job growth is still anemic in San Diego.
Population growth? But it's not growing that quickly, sub 1%.
Twenty-somethings who had holed up in their parents basements for the past 5 years surging out into the world saying to their parents, "I'm outta here!"?

Needless to say there was a dearth of constructions for several years, but also during that period a lot of single family homes got turned into rentals creating supply that way.

Well, I'll still be interested if we here from non-particular renters saying they can find an apartment. Finicky people always have problems finding rentals.

Hi Kettlepot,

Yeah, I agree. I was actually surprised to hear Mr. London so upbeat and optimistic regarding real estate appreciation estimates for San Diego. At the conference, Zillow's economist spoke first and he was getting GRILLED by the audience by why the Zestimates are way way off. LOL. I kind of felt sorry for him. I guess these people don't realize it's just something they made to get people to visit the website.

Mr. London actually said he disagreed with Mr. Humphries because Zillow didn't take into account much the supply and demand. He said that simply put, there is no where else to build in San Diego for the most part. He said that demand will outstrip supply and the only direction to build is upwards which many people won't want to see. He said that lots of these strip malls will get torn down and probably because multi-family units, condos, etc.

I still disagree with his opinion that 2014 will be better than 2013 as far as appreciation. Property can't keep appreciating at the levels of 2013.

But everyone pretty much agreed that rentals are heading up and occupancy rates are very high for SD.

[shmoov_groovzsd]

Originally Posted by earlyretirement

Hi Kettlepot,

Yeah, I agree. I was actually surprised to hear Mr. London so upbeat and optimistic regarding real estate appreciation estimates for San Diego. At the conference, Zillow's economist spoke first and he was getting GRILLED by the audience by why the Zestimates are way way off. LOL. I kind of felt sorry for him. I guess these people don't realize it's just something they made to get people to visit the website.

Mr. London actually said he disagreed with Mr. Humphries because Zillow didn't take into account much the supply and demand. He said that simply put, there is no where else to build in San Diego for the most part. He said that demand will outstrip supply and the only direction to build is upwards which many people won't want to see. He said that lots of these strip malls will get torn down and probably because multi-family units, condos, etc.

I still disagree with his opinion that 2014 will be better than 2013 as far as appreciation. Property can't keep appreciating at the levels of 2013.

But everyone pretty much agreed that rentals are heading up and occupancy rates are very high for SD.

ER, actually I do believe if the stock market is still headed (which many are predicting) upwards RE in SD will go higher than 2013. Though I am more skeptical about the markets breaking through the ceiling with the exception of the big boys and tech.

Actually, a real estate agent told me the other day that there is no more land to build in San Diego and interest rates are STILL at historic lows. This means prices are going to keep going up and we better get in now. That was a professional opinion

lol all kidding aside...

My impression of SD is that we dont appear to have actual large scale apartment complexes based on the population size of the city and county. This is just a laymans view from what I have seen listed in apartments.com etc vs private SFH rentals or condos.

I can say that at least in the city of LG, at the city level, there are many developers that working right now to buy, plow and build more housing along the beaten Broadway corridor. Based on what I have heard, this sounds like a deal more likely to happen than not. So that strip mall tear down theory sounds plausible.

[earlyretirement]

Yep. Stock market and RE as long as the Federal Reserve keep at it should continue for a while.

I got a chance to talk to Dr. Humphries privately for about 45 minutes. Sharp guy. Here is a presentation with a lot of interesting charts and statistics for San Diego and other cities in Southern California if you are interested.

http://cdn1.blog-media.zillowstatic....mit-e44862.pdf

Skip down to the "Affordability Index" for San Diego and you will see even at today's low interest rate environment it's bad (i.e. no grey color). Imagine once interest rates go up.