San Diego, CA Multifamily Market Report Q2 2026
San Diego Absorbs a Record Supply Wave as Deliveries Hit a 25-Year High
Demand
San Diego’s demand engine kicked into a different gear this quarter. Net absorption of 3,570 units was up 185.1% YoY, nearly triple the 1,252 units absorbed a year ago. That surge helped keep vacancy nearly flat at 3.8% and down from 4.18% in Q1. This is a market absorbing a genuinely large wave of new supply without much strain. Rent grew to $2,764, up 0.40% YoY, hovering near flat for the third straight year after the market’s huge 2021-2022 run. Occupied stock grew to 324,452 units, and with absorption running this strong, San Diego looks well-positioned to keep pace with what’s shaping up to be one of its biggest delivery years in decades.
Supply
San Diego is now the third California market building more, not less. Q2 completions of 2,330 units were fourfold from just 509 a year ago, and TTM completions climbed 57.8% to 6,793 units. Multiple regional trackers put 2025’s delivery total at San Diego’s highest level in roughly 25 years, with 2026 expected to run at a similarly elevated pace. Even so, the forward pipeline is shrinking. Units under construction have fallen to 9,950, just 2.95% of inventory, down from a 4.00% peak in Q2 2024 suggesting this wave, while historically large, is closer to its end than its beginning.
Investment Market
Investment activity has pulled back as the market digests all that new supply. The TTM volume fell 31.9% to $2.52B, with Q2’s $518.0M down 24.0% from a year ago.
Cap rates have ticked up modestly to 4.89% while price per unit held essentially flat at $364,801, just 5.4% below the 2022 peak of $385,596.
Volume
- $2.5B TTM volume (-32% YoY) Q2 2026: $518M
- Q2 volume down 24%
Pricing
- Cap rate 4.89%
- Price per unit $365k
- Caps ticked up modestly
