San Diego apartment rents tick up in May

Concessions dip as multifamily housing vacancy rate slips to 5.1%

By

Joshua Ohl

CoStar Analytics

June 2, 2025 | 10:05 AM

Rent growth roared back to life in May following April’s showers. Rents grew 0.3% in May, matching the best month of the year, while putting April’s rent losses in the rearview mirror.

Apartment operators typically push rents during the spring leasing season, when demand for apartments rises across the region. San Diego has been amid one of its strongest periods of apartment absorption, which measures the change in occupancy over time, since2021, although it hasn’t directly translated into strong rent growth.

Rents have increased only 0.1% during the second quarter, compared to 0.7% cumulative growth last April and May. Landlords have increasingly prioritized occupancy over rent growth in recent quarters, which has translated into San Diego’s vacancy falling 20 basis points year over year to 5.1%.

Keeping units filled has often required concessions. However, after one-quarter of the properties contacted by CoStar research reported using concessions during the first four months of the year, that figure was cut in half in May. It’s too early to tell if that trend will carry through the summer; numerous property managers have suggested that they will likely be necessary for most of the year.

In May, rents rose the fastest in luxury properties across San Diego, up 0.5% month over month. Lower-rated properties recorded a 0.3%month-over-month increase, while rents in mid-tier properties rose a marginal 0.1%.

Rent growth accelerated across some of San Diego’s most expensive neighborhoods in May. In University Town Center, where asking rents average $3,215 per month, rents rose 1.5% month over month, although rents have still fallen on a year-over-year basis.

Along coastal neighborhoods in the North Shore Cities, rents increased 1% in May to an average of almost $3,575, though as in the UTC area, rent growth is still underwater in the past 12 months. Similarly, rents were up 1% in neighborhoods along the South I-15corridor, bringing rents up to an average of $3,230 per month. That also brought year-over-year rent growth into positive territory.

Some neighborhoods weren’t so fortunate in May, and new supply played a role. In downtown, struggling under the weight of over 1,900new market-rate units that opened in 2024, rents fell 0.4% to an average of $3,130 per month. Concessions have also been highest downtown, where one-third of the properties reported offering some free rent. That has come down from over 50% of properties offering concessions earlier this year.

Similarly, in Chula Vista, where several properties have already opened this year and another 1,000 units are under construction, rents fell 0.4% month over month to an average of $2,460 per month.

With occupancy at the top of mind among operators, rent growth maybe held in check through 2025, and the rapid growth that we saw a few years ago in the spring months may not materialize.