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San Diego

San Diego is a major city on the coast of the Pacific Ocean in Southern California, along the border of Mexico. With a population of nearly 1.5 million people, it is the second-largest city in California and the eighth largest in the country. Despite having one of the highest costs of living in the US, the city has a good demographic outlook for the coming year. The population growth rate is expected to be near the national rate, which is a good sign for current and future San Diego real estate investors since with this growth comes an increased demand for housing, on both the rental and purchase side. According to NeighborhoodScout, more than 54% of residents in the city live in rental properties as opposed to owning their own homes, meaning the tenant pool for rental properties is already large. 

America's Finest City has one of the most diverse and dynamic economies in the US, with a highly-skilled workforce and strong job growth. The defense industry has long been (and still is) a pillar of the local economy. The city is home to the largest concentration of military in the world. Along with being the headquarters of several major national defense contractors, it also hosts the largest naval fleet in the world. 

Due to its strategic location on both the US-Mexico border and on the Pacific Rim, San Diego is an important center of international trade. It is home to the world’s busiest international border crossing, and to one of America’s top 30 containership ports. 

San Diego is also a leading hub for manufacturing and innovation companies, spanning across many different industries including aerospace, shipbuilding and repair, biotech and medical treatment, telecommunication, craft brewing, and biofuel production.  

Tourism is a major industry in San Diego and accounts for one-in-eight local jobs. San Diego is one of the nation’s top-ranked tourist destinations, owing to the city’s year-round hot weather, miles of beaches, and countless tourist attractions such as Balboa Park, San Diego Zoo, and SeaWorld San Diego. Nearly 35.8 million people visited the city in 2018, spending an estimated $11.3 billion. 


The San Diego real estate market was named one of the Top 30 US Markets to Watch by PWC in its annual Emerging Trends in Real Estate: United States and Canada 2019 report. Although housing is expensive in San Diego, strong employment and income growth are generally able to drive demand for it. It is worth noting that San Diego home prices are relatively affordable compared to other top markets in the state of California. That’s why if you can afford to buy an investment property in the city, then the San Diego market can be a great place to invest in real estate. According to the PWC report, the San Diego housing market benefits particularly from growth in the technology industry, and consequently, development trends are changing in order to adjust to technical requirements. In an attempt to solve the issue of affordability, developers are in the process of building additional types of housing as well as more housing and relaxing some rules that allow for variances in construction.

San Diego Realtors and Real Estate Agents


San Diego  Real Estate Investment Performance
Facts and Market Trends in San Diego
Homes For Sale1,000
Airbnb Properties2,860
Rental Properties3,872
Traditional Vacancy rate4.70%
Airbnb Occupancy Rate59.03%
Mashmeter66.93%
Median Price$699,000
Median Rent Price$2,610
Price/sqft$594
Median Days on Market51
Price to Rent Ratio27.3
Average Cap Rate
Airbnb1.43%
Traditional1.64%
Average Rental Income
Airbnb$2,947
Traditional$2,428
 
Median Household Income$76,662
Population3,317,749
Transportation in San Diego
51 / 100
Somewhat Walkable
37 / 100
Some Transit
39 / 100
Somewhat Bikeable
San Diego  Rent Prices
RENTAL STRATEGY STUDIOS 1 ROOM 2 ROOMS 3 ROOMS 4 ROOMS
Airbnb$1,765$1,914$2,394$3,477$5,929
Traditional$1,580$1,546$2,073$2,883$3,649
San Diego, CA - Homes for Sale - Newly Listed
$618,000
MLS OC21078411
3993 Jewell Street #C1
San Diego, CA 92109
Pacific Beach
Condo/Coop
2 beds2 baths907 sq.ft.
CAP RATE
Trad. 1.69%Airbnb 1.66%
$529,000
MLS 210009585
6018 Malcolm Dr
San Diego, CA 92115
Redwood Village
Single Family Residential
2 beds1 baths810 sq.ft.
CAP RATE
Trad. 0.58%Airbnb 3.09%
$800,000
MLS 210008843
2920 Bancroft St
San Diego, CA 92104
Burlingame
Single Family Residential
2 beds2 baths1,609 sq.ft.
CAP RATE
Trad. 0.71%Airbnb 0.18%
$1,225,000
MLS 210009206
8508 Ednalyn Ln
San Diego, CA 92127
Black Mountain Ranch
Single Family Residential
4 beds3 baths2,165 sq.ft.
CAP RATE
Trad. 5.65%Airbnb 1.47%
Top Performing San Diego Properties
$764,900
MLS 210008783
16910 Bixby St #11
San Diego, CA 92127
Black Mountain Ranch
Townhouse
3 beds3 baths1,450 sq.ft.
CAP RATE
Trad. 3.08%Airbnb 7.86%
$435,000
MLS 210008151
7049 Appian Dr #B
San Diego, CA 92139
Bay Terraces
Single Family Residential
3 beds2 baths1,224 sq.ft.
CAP RATE
Trad. 2.20%Airbnb 7.80%
$749,000
MLS SW21070073
16913 Laurel Hill Lane #139
San Diego, CA 92127
Black Mountain Ranch
Condo/Coop
3 beds4 baths1,460 sq.ft.
CAP RATE
Trad. 2.90%Airbnb 7.77%
$525,000
MLS 210006760
3877 Pell Pl #417
San Diego, CA 92130
Del Mar Heights
Single Family Residential
1 beds1 baths900 sq.ft.
CAP RATE
Trad. 1.83%Airbnb 7.73%
Recently Sold Homes in San Diego, CA
$0
MLS
3749 KINGSLEY STREET
San Diego, CA 92106
Loma Portal
Single Family Residential
2 beds1 baths1,087 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$875,000
MLS 210006234
3464-3466 Durant Street
San Diego, CA 92113
Stockton
Multi Family
6 beds6 baths0 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$675,000
MLS 210003859
3736-38 46th St
San Diego, CA 92105
Fairmount Village
Multi Family
4 beds2 baths0 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$1,379,000
MLS 210006620
3333-35 Nile Street
San Diego, CA 92104
Cherokee Point
Multi Family
6 beds4 baths0 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Property Value Changes and Real Estate Appreciation in the San Diego Housing Market

The San Diego real estate market has witnessed a strong real estate appreciation in recent years. According to NeighborhoodScout, since Q1 of 2000, San Diego property values have increased by 145.43%, which is an average annual appreciation rate of 4.77%. According to Zillow, the median house price within the city climbed by a modest 1.8% over the past year, and even smaller gains (0.5%) are predicted through the summer of 2020.


Zillow lists the current market temperature as “neutral”, with the median San Diego home value standing at $634,100. After several years of being a very hot seller’s market, it now seems that the San Diego housing market is cooling off and shifting towards a balanced market, with an equal number of buyers and sellers. Home prices in the area are rising more slowly today than in past years. That’s why buying an investment property in San Diego makes for a good real estate investment.

San Diego, CA Top Multi Family Homes
$645,000
MLS TR21066518
144 S 36th Street
San Diego, CA 92113
Stockton
Multi Family
beds baths0 sq.ft.
CAP RATE
Trad. 5.96%Airbnb N/A
$3,250,000
MLS WS20159905
4141 Central Avenue
San Diego, CA 92105
Teralta West
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 5.56%Airbnb N/A
$1,000,000
MLS 200030525
3733 Chamoune Avenue
San Diego, CA 92105
Fairmount Village
Multi Family
6 beds2 baths1,742 sq.ft.
CAP RATE
Trad. 5.17%Airbnb N/A
$720,000
MLS PTP2100401
5611 Cumberland
San Diego, CA 92139
Paradise Hills
Multi Family
0 beds0 baths0 sq.ft.
CAP RATE
Trad. 4.91%Airbnb N/A
Homes Below Median Price in the San Diego, CA Real Estate Market
$764,900
MLS 210008783
16910 Bixby St #11
San Diego, CA 92127
Black Mountain Ranch
Townhouse
3 beds3 baths1,450 sq.ft.
CAP RATE
Trad. 3.08%Airbnb 7.86%
$435,000
MLS 210008151
7049 Appian Dr #B
San Diego, CA 92139
Bay Terraces
Single Family Residential
3 beds2 baths1,224 sq.ft.
CAP RATE
Trad. 2.20%Airbnb 7.80%
$749,000
MLS SW21070073
16913 Laurel Hill Lane #139
San Diego, CA 92127
Black Mountain Ranch
Condo/Coop
3 beds4 baths1,460 sq.ft.
CAP RATE
Trad. 2.90%Airbnb 7.77%
$525,000
MLS 210006760
3877 Pell Pl #417
San Diego, CA 92130
Del Mar Heights
Single Family Residential
1 beds1 baths900 sq.ft.
CAP RATE
Trad. 1.83%Airbnb 7.73%
San Diego Airbnb Growth and Regulations

With tourists visiting in record-breaking numbers, San Diego is the 2nd most popular destination in California for Airbnb users after Los Angeles. Some 1 million guests stayed in Airbnb rental properties throughout San Diego County in 2018, bringing hosts a total of $213 million in income, the second-highest Airbnb income in California after LA.

San Diego’s City Council is in the middle of a long and ongoing battle between supporters and opponents of vacation rentals. It spent much of 2018 arguing over proposed short-term rental regulations, especially after it enacted a new law sharply curtailing Airbnb rentals in the city. However, a successful referendum petition drive led by Airbnb supporters forced the City Council to repeal the new law. The law in question, which was to go into effect in July 2019, would have limited short-term rentals in all parts of the city to owners’ primary residences (i.e. barring the use of non-owner occupied short-term rentals), and only for 6 months of each year while hosts are not present. Under this ordinance, all San Diego Airbnb operators would have been required to obtain a Short-term Rental License annually for a fee of $949, as well as a San Diego transient occupancy tax (TOT) certificate. 

In May 2019, a new bill to regulate short-term rentals in San Diego County’s coastal communities won approval in the state Assembly. The bill takes aim at vacation rental platforms such as Airbnb, HomeAway, and VRBO. Under this assembly bill (AB-1731), vacation rental platforms are restricted to listing a residential property for no more than 30 days a year unless the host was on site. Nevertheless, the bill allows year-round rentals for traditional home-sharing in which hosts rent out a spare bedroom or a granny flat on their property. The listing of any other home or investment property is banned.

This bill received mixed reactions and divided local jurisdictions in San Diego County’s coastal zone. As for the Airbnb platform, it voiced strong objection to it.

The future of Airbnb in San Diego is uncertain given the years-long delay in getting any firm regulations adopted. The AB-1731 bill is supposedly a pilot program that shall expire in five years, and that shall be studied to determine the effectiveness of the tighter controls.

San Diego, CA Top Airbnb Homes
$73 per night
$102 per night
$105 per night
Entire home/apt · 1 bed
Central Pacific Beach Fun Bike Cottage
673
$67 per night
Entire home/apt · 1 bed
charming, colorful, close to beach
634
San Diego, CA Homes for Rent
$3,500
MLS 210009450
2955 McCall St #301
San Diego, CA
La Playa
Single Family
2 beds2 baths1,294 sq.ft.
$2,795
MLS 210009565
3969 8th #1
San Diego, CA
Hillcrest
Single Family
2 beds1 baths1,000 sq.ft.
$2,400
MLS 210009471
4330 Meade Ave.
San Diego, CA
Teralta East
Single Family
2 beds1 baths800 sq.ft.
$2,195
MLS 210009380
San Diego, CA Open Houses
Open 11 AM to 4 PM
$430,000
MLS PW21052352
10766 Dabney Drive #29
San Diego, CA 92126
Mira Mesa
Condo/Coop
2 beds2 baths920 sq.ft.
CAP RATE
Trad. 1.92%Airbnb 1.96%
Open 1 PM to 4 PM
$1,150,000
MLS 210009300
3771 Ocean Front Walk
San Diego, CA 92109
Mission Beach
Single Family Residential
3 beds1 baths625 sq.ft.
CAP RATE
Trad. 3.53%Airbnb 1.86%
Open 2016-09-22 11:30:00 to 2016-09-22 14:30:00
$499,000
MLS 210009104
5810 Riley St. #10
San Diego, CA 92110
Morena
Townhouse
2 beds1 baths1,032 sq.ft.
CAP RATE
Trad. 2.48%Airbnb 2.43%
Best San Diego Neighborhoods for Buying Investment Property
82%
Mashmeter
property price
$515,000
Median
cap rate
8.63%
Traditional
8.76%
Airbnb
rental income
$3,702
Traditional
$3,758
Airbnb
homes for sale
17
occupancy rate
64%
Airbnb
62%
Mashmeter
property price
$1,341,450
Median
cap rate
3.25%
Traditional
5.07%
Airbnb
rental income
$3,635
Traditional
$5,673
Airbnb
homes for sale
8
occupancy rate
47%
Airbnb
68%
Mashmeter
property price
$1,084,950
Median
cap rate
7.49%
Traditional
3.94%
Airbnb
rental income
$6,776
Traditional
$3,559
Airbnb
homes for sale
18
occupancy rate
63%
Airbnb
87%
Mashmeter
property price
$765,000
Median
cap rate
5.91%
Traditional
5.57%
Airbnb
rental income
$3,767
Traditional
$3,552
Airbnb
homes for sale
26
occupancy rate
65%
Airbnb
85%
Mashmeter
property price
$569,000
Median
cap rate
6.33%
Traditional
9.20%
Airbnb
rental income
$3,002
Traditional
$4,361
Airbnb
homes for sale
1
occupancy rate
51%
Airbnb
All San Diego Neighborhoods