Apartment Market Dips in San Diego County

SAN DIEGO, CA-More apartment dwellers moved out than moved into San Diego County over the past year ending Q1 2002. However, the county’s economy remains relatively robust and demand for apartments remains strong, according to a new report from Hendricks & Partners.

“Net move-outs outnumbered move-ins, resulting in negative absorption of 1,168 units in the first quarter of 2002, compared to positive 448 one year ago,” the Hendricks report states.The drop in move-ins reflects several factors, the report says, among them “low interest rates that put home-buying within the reach of more renters, and the war on terrorism, which prompted some military families leave the area to return to their home states.”

Nonetheless, the county’s apartment market continues to benefit from rising home prices, and from the continued housing shortage in the region. Although the overall average vacancy rate increased from 2.4% in the first quarter of 2001 to 4.6% in the first quarter of 2002, the report notes, vacancy rates remain low in more affordable submarkets that have become more popular as renters seek to cut costs. One result is that owners of higher-end complexes are discounting rents to attract tenants. Hendricks says the average market rent increased 4.4%, from $1,041 to $1,087 in the year ending March 31, compared with a 10.3% increase the year before.