Our industry specialist has reviewed and approved the final article. Also, some of the data presented here have been integrated into the San Diego real estate spreadsheet template.
Thinking of buying in San Diego? Get our financial spreadsheet tailored to this specific market.
Thinking about investing in San Diego real estate in 2025? You're on the right track.
Despite economic shifts, San Diego's property market remains a strong contender, with demand consistently outpacing supply.
In this blog post, we will explore why investing in this vibrant city is a wise choice.
We rely on solid, up-to-date data and statistics from trusted sources to guide our analysis.
By the end, we will share our own conclusions based on a comprehensive review of the information. Enjoy the read!
How this content was produced 🔎📝
This article offers thoughtful insights and analysis based on reliable sources, but it should not be considered financial advice. We work hard to research, compile, and analyze data to give you a well-informed perspective. However, as you can guess, our analysis involves subjective choices, such as source selection and methods, and it cannot fully capture the market's complexity. Please, always do your own research, consult professionals, and make decisions based on your own judgment. Any financial risks or losses are your responsibility. Additionally, you should know that we have no affiliation with the sources mentioned, ensuring our analysis is completely impartial.
1) San Diego's "vacancy rate" of 6.5% shows a bustling and competitive market with most spaces filled
Signal strength: strong
The vacancy rate in San Diego is 6.5%, which is considered very low. This low vacancy rate indicates that the market is highly occupied and competitive, meaning there is strong demand for rental properties.
When demand is high, it often leads to increased rental prices, making it a potentially lucrative opportunity for property investors. In such a market, properties that are easily rented are typically well-maintained and located in desirable areas.
For instance, modern apartments in downtown San Diego are highly sought after due to their proximity to amenities and employment centers. This makes them a prime choice for renters looking for convenience and lifestyle.
If the vacancy rate were to rise above 10%, it might indicate a less favorable market for property investment.
Sources: NeighborhoodScout, DataUSA, USCensus
2) San Diego boasts a commendable "livability score" of 75, indicating a pleasant living environment
Signal strength: moderate
The livability score of 75 in San Diego is a strong indicator that buying property here is a wise investment.
This score reflects the city's excellent climate, with mild temperatures year-round, making it a desirable place to live. Additionally, San Diego boasts a robust job market, particularly in technology and biotechnology sectors, which attracts a steady influx of professionals seeking housing. The city's diverse cultural and recreational opportunities, from beaches to museums, further enhance its appeal.
These factors contribute to a high demand for housing, which can lead to property value appreciation over time. As a result, investing in real estate in San Diego is likely to yield positive returns.
However, if the livability score were to drop below 60, it might suggest underlying issues that could affect property values negatively.
Source: AreaVibes
We created this infographic to show how property prices in San Diego compare to other big cities in California. It shows the median price as well as the price per sqft, making it easy to see which places might offer the best value. We hope you find it helpful.
3) San Diego's 2025-2026 projects, like "Beyer Park" and "Gaylord Pacific Hotel," are expected to increase real estate values
Signal strength: moderate
San Diego's upcoming infrastructure projects, such as Beyer Park and the Gaylord Pacific Hotel, are poised to boost real estate values in the area, making property investment an attractive prospect.
These projects, part of the city's Capital Improvements Program, are expected to boost the desirability of neighborhoods. For instance, the development of Beyer Park and Mira Mesa Community Park is likely to make these areas more appealing, potentially leading to increased property values. Similarly, the Gaylord Pacific Hotel and Convention Center in Chula Vista will transform the bayfront, enhancing the area's appeal and possibly driving up real estate prices.
Moreover, the city's investment in street resurfacing, with a budget of $104.6 million, aims to improve the overall livability and attractiveness of neighborhoods. Better roads can make areas more desirable to potential buyers, contributing to rising property values. Additionally, projects like the Convoy District Redevelopment and the North Park-Mid-City Bikeways are set to improve transportation and bikeability, further enhancing the appeal of these neighborhoods.
These infrastructure improvements are expected to create a ripple effect, making San Diego a more attractive place to live and invest in. As the city becomes more desirable, property values are likely to rise, offering potential returns for investors.
Sources: Inside San Diego, SD Today, YouTube
4) San Diego's population continues to rise, experiencing a 0.78% growth
Signal strength: moderate
San Diego's population growth, although slow, is a positive indicator for real estate investment. The city experienced a 0.78% increase from 2023 to 2024, reaching a population of 3,345,000.
This steady growth suggests a continued demand for housing, which is crucial for property investors. Even with forecasts predicting a future decline, the current increase supports the idea that there is still a need for residential properties.
Moreover, the region faces a housing shortage of approximately 100,000 units, highlighting an opportunity for investors to meet this demand. The shortage, combined with the current population growth, indicates a potential for property value appreciation.
Additionally, the demand for housing is not solely driven by population numbers but also by job growth and economic factors. San Diego's economy continues to attract new residents, further supporting the real estate market.
Sources: Axios, Synergos Technologies, Macrotrends, SANDAG Regional Growth Forecast
Our team designed this infographic to show how competitive the real estate market in San Diego is vs. other major cities in California. It shows the percentage of sales above the list price, a key indicator of market competition.
So, is investing in real estate in San Diego a solid option in 2025? Absolutely, it is.
Investing in San Diego's real estate market in 2025 is a promising opportunity.
The city's low vacancy rate of 6.5% indicates a bustling and competitive market, which is great news for potential investors. This low rate suggests a strong demand for rental properties, often leading to increased rental prices and, consequently, higher returns on investment. Additionally, San Diego's livability score of 75 highlights its appeal as a desirable place to live, thanks to its excellent climate and robust job market.
Moreover, upcoming projects like Beyer Park and the Gaylord Pacific Hotel are expected to boost real estate values, making property investment even more attractive. The city's population growth, with a 0.78% increase, further supports the demand for housing, presenting a lucrative opportunity for investors. With a housing shortage of approximately 100,000 units, there's a clear potential for property value appreciation.
Related analyses:
- Here is why prices are going to climb in 2025 in San Diego