San Diego Real Estate Trends
In 2018, the CRE industry saw accelerated growth and prosperity. In 2019, that growth has slowed significantly. That being said, the landscape in 2019 has changed the way that the CRE industry operates while the current trends have ushered CRE into a new and different time. Here are the 2019 real estate trends to be aware of in San Diego.
Number of Rentals and Median Rent
The data for 2019 has shown growth in most areas of San Diego real estate in 2019. According to Trulia, the median rent in San Diego is up $50 from its highest point in 2018, showing modest growth. Meanwhile, the number of rentals has seen a drastic uptick. From a Trulia study, the San Diego market trends indicate an increase of $7,750 (1%) in median home sales over the past year. Though the study mostly saw growth, there were some losses. For the same time period of 2018 to 2019, the average price per square foot fell from $447 to $446. The modest growth seen in this period is slower than past years, most likely marking the beginning of a flattening of rents in years to come. Another concern is the presence of online shopping and its effect on commercial real estate. San Diego has around 30 malls and as more and more shoppers turn to online stores and retailers, the CRE industry will likely begin taking a hit.
The Presence of AI
AI is here to stay and has become an integral part in the construction of commercial buildings in 2019. These buildings that have AI woven into practically every part of them are called smart buildings and are becoming ever more present. These smart buildings track foot traffic in buildings in order to regulate heating and cooling and can monitor local weather forecasts to change accordingly. Smart buildings can save a lot of money in operating costs but as of 2019 still require a lot of human interaction with the technology to work out the kinks and to guide AI along.
The Demand for Class A Office Space
Tech companies are descending on San Diego in droves and bringing with them demands for different kinds of office spaces. These tech companies are on the cutting edge of technology, so it is only fitting that they want an office space that is on the cutting edge of what real estate has to offer. Class A office space is more sought after than ever, making builders and landlords wonder if they can keep up with increased demand. While demand is increasing for class A office space, demand for class B office space has subsequently taken a hit.
Stall in Building New Inventory
As builders worry about the approaching market cool-off, new building projects have been stalled across San Diego. While building has slowed to a near halt, the demand for property has not. Not all sectors have been brought to a halt, such as the multi-family sector which has continued adding new inventory. Even with the addition of new inventory in multi-family, building rates are still well below historic averages.