San Diego Multifamily & Apartment Building Blog

What Is Currently on the Market? San Diego 2–4 Unit Active Inventory Update

What Is Currently on the Market? San Diego 5+ Unit Multifamily Active Inventory Update

San Diego voters will decide Measure A in June 2026, a local empty homes tax on vacant non-primary residences. Here is what multifamily owners should know.

San Diego’s multifamily market is not moving as one single market right now. While new supply and flatter rent growth are putting pressure on parts of the county, coastal assets in Pacific Beach, Mission Beach, Ocean Beach, Point Loma, and Coronado are still being supported by scarcity, limited construction, and long-term location demand. Right now, coastal multifamily is not immune to the market, but it is playing by a different set of rules.

San Diego’s multifamily market has entered 2026 with a noticeably different tone than what owners have grown accustomed to over the past decade.
According to recent data from CoStar Analytics, rent growth has effectively stalled through the first quarter, raising important questions about pricing, underwriting, and strategy moving forward.

Short-term rentals are no longer a side category in San Diego’s lodging market. According to recent CoStar Analytics data, STR demand has grown from roughly 10% of hotel demand before 2020 to nearly 20% today. In San Diego, STR inventory is now equivalent to approximately one-quarter of total hotel room supply, making STRs a measurable part of the same demand pool as traditional hotels.

San Diego’s multifamily market continues to show a clear divide between smaller 2–4 unit properties and larger 5+ assets. While transaction volume remains strong in the 2–4 space, pricing is still adjusting to align with today’s lending environment, with most deals trading slightly below list. Properties supported by real in-place income and clean operations are consistently outperforming those reliant on future upside assumptions.

San Diego apartment listings are sitting longer as pricing expectations diverge from investor underwriting. See why accurate valuations are critical to selling.

Improvement 1031 exchanges allow investors to defer taxes while reinvesting into multifamily properties that require renovations or upgrades. For San Diego investors pursuing value-add apartment buildings, this strategy can unlock long-term upside when structured correctly.

Financing an apartment building is very different from financing a duplex or fourplex. Once a property reaches five units or more, lenders treat it as a commercial asset rather than residential real estate. This shift changes how the property is evaluated, how loans are structured, and what investors must demonstrate in order to secure financing.

The 2–4 unit multifamily market occupies a unique space in San Diego real estate. Duplexes, triplexes, and fourplexes behave very differently from larger apartment buildings because they qualify for residential financing rather than commercial underwriting.

In probate and trust sales, uncertainty creates risk. When beneficiaries do not receive consistent communication, assumptions fill the gap. Assumptions lead to conflict. Don’t let this happen to you.

Selling an apartment building through probate is not the same as selling a single family residence. Income property is valued based on performance, risk, and financeability. When trustees approach a multifamily sale emotionally or without specialized guidance, value is often left on the table.

When a multifamily property enters probate in San Diego, valuation becomes the foundation of every decision that follows.

San Diego multifamily lending has changed in 2026. Lenders are prioritizing in-place cash flow, tighter DSCR, and conservative assumptions — meaning refinance proceeds may be lower than expected. Understanding how your property underwrites today is critical before refinancing or selling.