San Diego Market Update: November Slowdown or Setup for Opportunity?
This is not clickbait — our unit sales for November are down 41.25% compared to last year. That’s a massive drop, and I’m hoping we’ll see some correction as we close out the month.
Interest rates had been trending down for weeks until the last Fed meeting, which — ironically — pushed them back up despite a 0.25% rate cut.
Combine that with the government shutdown, and you’ve got a recipe for hesitation across the board. But here’s the silver lining: motivated sellers are stepping up with amazing incentives, and those deals are becoming easier to spot every week.
When I post data, I’m looking only at residential sales in Downtown and across San Diego County, using the average sales price when the number of sales is significant. (I’ve found the median doesn’t accurately reflect San Diego’s true market movement.)
Market Spotlight: The San Diego Regional Apartment Market
Source: London Moeder Advisors
According to LMA’s recent comprehensive report, the San Diego apartment market remains stable, healthy, and a sound long-term investment — for those who do their due diligence.
Supply: Up 15% (?71,000 units) over the past decade. ( over built)
Occupancy: Holding strong at 94% — nearly full ( I dispute that number)
Urban Areas: Downtown & other hubs see ?10% vacancy, higher than suburban areas. This is an estimate from the London Group and is WRONG, vacancy rates are much higher Downtown. With new buildings fighting for applicants the next 12 to 24 months it will benefit the tenant
Rents: Up 50% in 10 years to an average of $2,500/month, but stable the past 2 years
Construction: Slowing due to high costs and flat rent growth
Economic Pressure: Inflation, tariffs, and potential stagflation are creating uncertainty
New Starts: 9,000 in 2024; 3,800 so far in 2025
Absorption: ~3,600 units per year — about a two-year pipeline
Unit Mix: Smaller, younger-oriented layouts — not designed for families
There’s short-term uncertainty, but long-term optimism remains strong. Investors are still active — using more equity than debt — and rents are expected to rise again once the pipeline clears, likely within two years.
* Collectively, credit card balances rose by $24 billion in the 3rd quarter to $1.23 trillion, up 5.75% from a year earlier to a fresh all-time high. The average credit card balance per consumer now stands at $6,523, up 2.2% year over year. (CNBC)
* Just 21% of buyers were first-timers in the 12 months ending June 2025, only about half the long-time average share of 38% in records going back to 1981. Meanwhile, the average age of the first-time buyer rose once again, to 40. All cash buyers rose to 26% (but this does not factor in those who buy cash and refinance within 30 days after, thereby securing financing AND the ability to deduct all interest costs). Most repeat buyers – 52% – are aged 55-74 years old. Among all home buyers, 61% are married couples, 21% are single women, and 9% are single men.
* US companies announced 153,074 job cuts in October – the highest since 2003 – driven by the technology and warehousing sectors attributed to AI adoption, softening consumer and corporate spending, and rising costs, which are driving belt-tightening and hiring freezes. Year-to-date job cuts have exceeded 1 million. US-based employers have announced the fewest hiring plans since 2011. (Bloomberg)
Ferrari – an indicator of ultra-luxe markets – posted net profit of $439.5 million in the 3rd quarter, a nearly 2% increase from the same period in 2024, defying the impact of import tariffs by reducing production and other costs…..and raising prices by around 10% attributed to tariffs…paid for by those buying their cars. Revenues rose over 7%. (CNBC)
* The Supreme Court appears to be resting their arguments against the tariffs on certain imported goods and have focused on the fact that tariffs are taxes which need Congressional approval if not implemented for national emergencies. If the tariffs are removed or reduced, many imported goods for construction could see prices come down.
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