San Diego County apartment vacancy has reached 6.1 percent, the highest CoStar has recorded this century and above the 5.7 percent peak from the 2009 recession. Advertised rents look flat, but big buildings are giving away weeks of free rent. Owners who price to the effective market and lease quickly stay ahead of it.
A record that arrived quietly
For most of the years I have managed rentals in San Diego, vacancy was the number nobody watched. Demand ran so deep that a clean home in a good neighborhood rented before it had time to sit, and the only real pricing question was how much higher this year’s number should be than last year’s. That is the backdrop that makes this summer stand out. When I wrote my mid-year read on the market a month ago, I described conditions as merely normal. The newest data has moved past normal.
The Union-Tribune reported on July 1 that county apartment vacancies are now the highest this century. CoStar puts the rate at 6.1 percent, above the 5.7 percent record set during the 2009 recession and more than double the 2.6 percent of 2021. The cause is not weak demand. It is supply. Roughly 5,000 new apartments delivered in 2024, another 5,600 followed in 2025, and about 4,000 more have opened so far this year, the tail of a construction pipeline that started when money was cheap in 2020 and 2021 and that concentrated in Mission Valley, downtown, and the transit corridors.
The advertised rent is not the real rent
Here is the part the headlines hide. Asking rents have barely moved, and Zumper’s June report still ranks San Diego the tenth most expensive rental market in the country. But the buildings competing hardest for renters are discounting through concessions instead of price. Newmark told CBS 8 that four to eight weeks free has become a common offer, and one longtime local apartment operator wrote in Voice of San Diego that two months free is now easy to find, which works out to a 16.7 percent cut in effective rent over a year.
Large operators structure it this way for their own reasons. State law caps how fast a lowered rent can climb back, and lenders underwrite buildings off the base rent, so free weeks protect the paper number while the real number falls. What that means for an individual owner is simple and easy to miss: the listed comps overstate what renters near you are actually paying, sometimes by a month or two of rent. Renters have caught on, and there is now a name for tenants who move every year to chase the next building’s move-in special: concession hopping.
The math that should set your price
A single-family home or condo is not an apartment tower, and that difference works in your favor right now. The supply wave is almost entirely apartment product. Nobody is delivering thousands of new houses this year, and the renters who are done with concession churn and want a yard, a garage, and room to settle in are still out there. But they compare prices like everyone else, and your price has to clear the effective market, not the advertised one.
The arithmetic is unforgiving. On a $3,600 home, every vacant month costs a little over 8 percent of the year’s income. Holding out for an extra $150 a month earns $1,800 across the lease, and one extra vacant month wipes that out twice over. In a market with this many alternatives, an overpriced home does not get negotiated down. It gets skipped. If the first two weeks bring thin showings and no strong applications, that is the market answering, and the answer does not improve in week five. How I build a real comp instead of trusting an algorithm is covered in how to verify your rent is market.
Speed and care both matter more now, not less. Rent ready before the listing goes live, same-day responses to inquiries, showings scheduled when applicants can actually attend, and screening that holds firm even when a vacant month makes a marginal application tempting, because a failed placement takes longer to recover from when re-leasing is slow. Newmark expects vacancy to normalize over the next 12 to 18 months as the pipeline empties, which means this is the operating environment well into 2027. The owners who reprice to the effective market early stay full through all of it. The owners anchored to their 2023 rent pay for the record one vacant week at a time.
Joe Wiseman is a licensed California broker (DRE #02043323) and owns Best Nest Property Management in San Diego.