San Diego’s rental market is dynamic, and 2025 promises to bring changes that renters, landlords, and investors need to understand. With high demand, rising rents, and new developments, staying informed is key. This article explores the latest trends, backed by recent data and expert insights, to help you navigate the San Diego rental market in 2025.

Current State of the San Diego Rental Market

As of April 2025, San Diego’s rental market remains competitive. The average rent is around $2,800 per month, 53% higher than the national average of $1,827 (Zillow Rental Manager). For specific apartment types, expect to pay:

• Studio: $1,984
• One-Bedroom: $2,341
• Two-Bedroom: $2,971
• Three-Bedroom: $3,877 or more (Apartments.com)

The vacancy rate is low at 4.5%, compared to the national average of 6%, indicating strong demand (Chase Multifamily Outlook). Over 5,900 rentals are available, but competition is fierce, especially in desirable areas (Zillow Rental Manager).

Key Trends for 2025

Several trends are expected to shape San Diego’s rental market in 2025. These include low vacancy rates, rising rents, new construction, and neighborhood-specific changes.

Low Vacancy Rates Continue

Forecasts suggest vacancy rates will stay low at 4.5% in 2025, tighter than the national average (Chase Multifamily Outlook). This is driven by:

• High Demand: San Diego’s desirable lifestyle, with beaches and a vibrant culture, attracts renters.
• Limited Supply: High home prices, around $950,000, keep many residents in the rental market (Norada Real Estate).
• Population Growth: The metro area population is projected to grow by 0.84% to 3,373,000 in 2025 (MacroTrends).

Low vacancy rates mean renters may face competition, and landlords can expect high occupancy.

Rental Prices on the Rise

Rents are projected to increase by 2.5% year over year in 2025 (Chase Multifamily Outlook). This follows a slight decrease of 0.5% in the past year (Apartments.com). Factors driving rent growth include:

• Strong Demand: Continued interest from in-migrants, especially from high-cost areas like Los Angeles.
• Economic Resilience: San Diego’s diverse economy, including tech and healthcare, supports rental demand (The Luxury Playbook).
• Limited Affordable Housing: High construction costs and zoning restrictions limit new affordable units.

For example, a one-bedroom apartment averaging $2,341 in 2025 could rise to $2,400 by year-end.

Impact of New Construction

San Diego is expected to see over 2,800 new apartments completed in 2025 (Chase Multifamily Outlook). This follows 3,226 units added in 2024 (CBS8). However, construction deliveries are trending down in Q1 2025 (Kidder Mathews). Key points:

• Market Absorption: The market is expected to absorb new units efficiently, keeping vacancy rates low.
• Location Focus: Many projects are in areas like Kearny Mesa and Downtown, boosting local supply.
• Affordability Challenges: New units are often high-end, which may not address affordability concerns.

This suggests that while supply will increase, demand will likely keep the market competitive.

Neighborhood-Specific Insights

Rental prices and demand vary across San Diego neighborhoods. Here’s a look at some key areas based on 2025 data (Rent.com):

Neighborhood | Avg. 1-Bed Rent | Annual Change

Little Italy | $3,629 | +23%

Carmel Valley | $3,359 | +13%

Downtown | $3,057 | +4%

Talmadge | $1,895 | 0%

City Heights | $1,750 | 0%

• High-Growth Areas: Little Italy and Carmel Valley are seeing significant rent increases due to their amenities and desirability.
• Affordable Options: Neighborhoods like Talmadge and City Heights offer lower rents, appealing to budget-conscious renters.
• Stable Areas: Downtown maintains steady growth, balancing demand and new developments.

Renters should research neighborhoods to find the best fit for their budget and lifestyle.

Economic Factors Influencing the Rental Market

Economic conditions will significantly impact the rental market in 2025. Key factors include:

• Employment Trends: Job growth slowed to 0.6% in Q4 2024, with losses in manufacturing and tech (San Diego Regional EDC). However, sectors like healthcare added jobs, supporting demand. Unemployment is trending up slightly (Kidder Mathews).
• Population Growth: The metro area population is expected to reach 3,373,000, growing by 0.84% (MacroTrends). This drives rental demand, especially among young professionals.
• Affordability Issues: With median home prices near $950,000, many residents remain renters, increasing competition (Norada Real Estate). Rising rents may push some to seek affordable areas or advocate for policy changes.
• Remote Work Impact: Remote work trends may shift demand to suburban areas with space for home offices, like Mira Mesa or Rancho Penasquitos.

“Lynnette Antosh, Senior Regional Sales Manager at Chase, notes, ‘San Diego has been very resilient in how it reacts to downturns. It’s a very livable area that’s attractive to a lot of people and has historically experienced relatively low vacancies and stable rents’ (Chase Multifamily Outlook).”

What Renters and Landlords Should Know

Tips for Renters

• Start Early: Begin your search at least two months in advance to beat the competition.
• Prepare Documents: Have pay stubs, references, and a credit report ready to apply quickly.
• Explore Neighborhoods: Consider areas like East County or Golden Hill for lower rents (Apartments.com).
• Negotiate Terms: Ask about flexible lease terms or included utilities to save money.

Advice for Landlords

• Maintain Properties: Regular upkeep attracts and retains quality tenants.
• Set Competitive Prices: Research local rates to avoid overpricing or underpricing.
• Offer Incentives: Consider perks like free parking or upgraded appliances to stand out.
• Stay Informed: Monitor new tenant protection laws, as they may affect evictions or rent increases (Good Life Management).

Conclusion

San Diego’s rental market in 2025 is set to remain competitive, with low vacancy rates, rising rents, and new construction shaping the landscape. Neighborhoods like Little Italy and Carmel Valley will see strong demand, while areas like Talmadge offer affordability. Economic factors, including job growth and population increases, will drive demand, though affordability remains a challenge. Renters and landlords can succeed by staying proactive and informed. By understanding these trends, you can make smart decisions in San Diego’s vibrant rental market.