The San Diego rental market is about to be blessed with MANY more rental units.
There will be thousands of rental condos downtown.
There will be entire condo projects (both new-construction and conversions) that will fail to sell and will become rental units.
Most of those vacant SFRs sitting on the market right now will become rentals. (another thread posted that there are 2900 vacant SFRs currently on the MLS – don’t tell me that a vacant house is owned by someone who is “testing the waters”.)
Many of the tract homes that are currently on the market and are still being built will ultimately become rentals. How much demand can there possibly be to buy low-quality tract homes in the $700K – $2mil price range? (beam me up Scotty, there’s no intelligent life on this planet)
Contributing to this rise in rental inventory will be the exodus of wage-earners from San Diego.
Some of this out-migration will be of people formerly employed in the real estate industry. Many of them will try to remain in San Diego but will ultimately tire of life as a waiter or waitress (or other jobs in the “hospitality & leisure” category) and then move on.
The more worrisome exodus is of the people who are choosing to leave San Diego because the cost of home ownership is too high. Realizing they will never obtain the “American Dream” of homeownership in San Diego, they are moving on to other locales.
Along with this out-migration of people, I believe we may also see an increase in the occupants-per-dwelling number. As inflation continues to feed into the cost-of-living, people will choose (or be forced economically) to double and triple-up in existing housing units. This trend (if it occurs) will reduce the demand for local housing units.
In summary, I see lots of new rental housing becoming available in the next two years. These new rentals will come from two sources: 1) over-supply of condos and tract homes; 2) reduced demand for housing as people leave San Diego and increase the occupants-per-dwelling number.
