SAN DIEGO — Coming out of the peak season for apartment renting, San Diego became the most competitive rental market in Southern California for the first time in years, according to a new report.
The report, conducted by the real estate website RentCafe, analyzed data — including vacancy rates and number of renters that applied for the same apartment — from over 130 markets across the country to determine the nation’s hottest renting spots from April to June of this year.
Nationwide, competitiveness eased between last year’s peak season and this year’s, with more than half of the markets analyzed seeing a “cooldown.” According to the report, this trend is driven by an increase in new apartments and the lingering economic effects from the pandemic.
Meanwhile, San Diego’s competitiveness in the rental market increased, surpassing Orange County for the first time in two years. The two areas ranked 18th and 19th respectively as the busiest markets this year out of all metros analyzed.
According to the report, the increase in competition is largely due to the severe shortage of housing amid strong population growth in the metro.
In San Diego, about 96% of units are occupied, leaving about 17 apartment-seekers to compete for the same available rental. On average, these available units are only on the market for a little more than a month — about 33 days — before it becomes occupied.
That deficit is in part the result of a limited supply of land for new development, which hinders new construction. Out of the all the units occupied during the peak season this year, the report found that only about 0.2% were newly built.
In order to meet the housing need, it is estimated that the city alone would need to build about 108,000 new units by 2029.
Orange County on the other hand saw a small uptick in newly built constructions between 2022 and 2023’s peak season, but it was not enough to expand options for renters in the area.
The county has a roughly 95.7% occupancy rate, prompting about 61% of renters stayed put during the peak rental season. For those available rentals, it takes about 40 days for the vacancy to be filled, the report found, with 13 prospective renters vying for the same unit.
Outside Southern California, Miami came out of the summer months as the most competitive rental market in the nation this year. Markets in the Midwest were also among the hottest places for apartment-seekers — with three in this part of the country making the top five nationally.
Milwaukee, WI, for instance, jumped from seventh to second place in terms of rental competitiveness since the start of the peak rental season.
A full list of the most competitive rental markets during this year’s peak season can be found below.
To compile the report, RentCafe’s research team analyzed Yardi Systems apartment data across 139 rental markets in the U.S. The data came directly from market-rate large-scale multifamily properties of at least 50 units, according to the website. Fully affordable multifamily properties were excluded from the analysis.
The markets were then ranked by their market competition score, which was calculated based on five metrics: apartment occupancy rate, average total days vacant, prospective renters per vacant unit; renewal lease rate, and share of new apartments completed during the same timeframe — and their averages for April to June.