Sales volume is down 19% this year, but the number of transactions is up 32% — a clear signal that the market isn’t slowing, it’s shifting. More properties are trading hands at more accessible price points, showing renewed buyer confidence. This early-cycle activity often precedes the next upswing, making 2025–2026 a strategic window for owners to reposition, trade up, and strengthen their portfolios before institutional capital returns in force.
Introduction 2026 is not a volume year — it is a strategy year. 2–4 Unit Owners: Scaling Matters Many 2–4 unit owners are equity-rich but unit-poor.The opportunity:Exchange into 5+ unitsReduce concentration riskImprove scalabilityIn Q3 2025, six units in some San Diego submarkets traded for the same price as four. 5+ Unit Owners: Soft Pricing Creates...
Introduction In 2026, successful multifamily development is driven by strategy alignment, not construction volume. Why Ground-Up ADUs Favor Hold Strategies Ground-up ADUs struggle as flip vehicles due to:High construction costsLong timelinesAppraisal frictionIncome seasoning requirementsSelling newly built ADUs typically makes sense only after a 2+ year hold. The “Free Dirt”...
Introduction ADUs dominate headlines, but they are not always the best development choice. In San Diego, the distinction between an Accessory Dwelling Unit (ADU) and a Dwelling Unit (DU) has real financial, zoning, and long-term implications. ADUs: Speed and Fee Advantages ADUs under 750 square feet are typically:Exempt from many development impact feesFaster to permitEasier to...
Introduction Concessions are no longer limited to new Class A construction. In 2026, rental incentives are materially impacting effective rents across nearly every San Diego submarket, from urban core neighborhoods to suburban infill.This is not a temporary anomaly — it is a supply-driven market response. Why Concessions Are Increasing in San Diego Several forces are converging:Over...
Introduction Rent control returned to the forefront in early 2026 with AB 1157, a proposed Assembly Bill that would materially alter California’s statewide rent cap structure.While AB 1157 is not yet enacted, its proposal alone is influencing owner behavior, underwriting assumptions, and long-term planning in San Diego What Does AB 1157 Propose? AB 1157 proposes several major...
Part 1: What AB 1154 Changed Effective January 1, 2026, AB 1154 allows:Non-owner-occupied financing for properties with JADUsConsideration of JADU rental income by lendersPreviously, many lenders required owner occupancy or discounted income entirely. What AB 1154 Did NOT Change JADUs may still:Share utilities or accessBe deed restrictedReceive inconsistent appraisal treatmentIncome...
Introduction SB 721 is no longer a future concern for San Diego apartment owners. As of January 1, 2026, the law is officially being enforced following a one-year delay, and owners with exterior elevated elements must now comply.This bill impacts multifamily, mixed-use, and condominium properties throughout San Diego County and has direct implications for financing, sales, and long-term asset...
2025 was a pricing-reset year for San Diego multifamily, marked by disciplined buyers and selective liquidity rather than distress. Small-unit demand remained strong due to financing access and optionality, while 5+ unit transactions centered on income durability, positioning owners who exchanged into higher-quality assets best for 2026.
With updated fire hazard maps now impacting more San Diego homes, AB 38 defensible space requirements are becoming a real factor in property values, escrows, and buyer decision-making.
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