The trade group says the drop recorded at the start of October came despite a wealth of new construction, particularly in the so-called luxury apartment market. A year earlier, the vacancy factor was 2%.

Despite the surge in construction of upscale units, community resistance toapartments and other infill development has thrown a wet blanket onmultifamily construction in general even as skyrocketing single-family homeprices and lack of affordability are sharpening demand for renteddwellings. Escalating development fees have also discouraged would-beapartment builders, according to Gail Scott, president of the apartmentassociation.

By submarket, vacancy rates ranged from a high of 2.03% in the NorthCounty to 1.42% and 1.43%, respectively, in the East County and in thecity of San Diego. In the super-tight La Jolla submarket, vacancies arebelow 0.1%, while the vacancy factor was 4.7% in the more downtroddenCity Heights district, according to the association.

Fast-rising rents are keeping apartment sales humming at a recordclip across the county, according to another recent report.

Some 276 apartment complexes were sold during the third quarter of 2000alone. That was a 33% increase over the same period a year ago and the largest number of resales in a decade, according to figures from the local office of Burnham RealEstate Services.

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Multifamily
San Diego