Local San Diego County observers are noticing a rising interest among investors of the multifamily segment for apartment and condo complexes. In many situations properties are receiving offers from several well-qualified buyers. Potential sellers of well-located San Diego County apartment buildings are expected to see a recovery, outpacing that of other segments for 2010. This increase in activity can be attributed to the low financing rates, quicker recovery, and the high demand for rentable San Diego apartments.
With the availability of land and new construction funds limited, many investors are finding themselves increasingly attracted to San Diego’s apartment market. Prospective home buyers are looking to San Diego as one of the nation’s healthiest investment markets for multifamily real estate. Also, financing rates at their record lows are becoming a key factor for investors, and there is much less distress real estate in San Diego.
Other factors investors are taking into consideration are the demographics and locations of potential purchases. Apartment complexes located near hubs of job growth, such as universities and military facilities, are most desirable. This region of Southern California has improved employment prospects as well as a scarcity of new apartment development as the population grows.
The rise in demand for apartment rentals has created intense competition between investors with as many as 20 bids on one property at a time. According to research firm MarketPointe Realty Advisors, the local multifamily homes vacancy rate has risen from 2.58 percent in September 2007 to 4.75 percent in March 2010. Even with the increase, it still puts us below the national average of 9 percent for major U.S. metro areas. Specifically, North County coastal area has a local vacancy of 3.59 percent.
As the real estate market begins to stabilize and financing rates continue to remain low, investors are seeking out their income properties and finding them here in San Diego County.
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