Rent in San Diego County is down for the first time since the Great Recession as the region is rocked by Covid-19 related job losses.

Average rent in San Diego County was about $1,850 a month in the second quarter, a small reduction of 0.3 percent annually, according to real estate tracker CoStar. It is notable because rent hasn’t dropped in the county since the third quarter of 2010.

Experts say the once-unstoppable rise in rents in San Diego County has been halted by large job losses, or income reductions, related to Covid-19.

Some high-end apartment complexes are also lowering rent a bit to attract new tenants. The 300-unit Palisade UTC, which opened around this time last year, has lowered its average rent to $3,949 a month, down about $151 since opening.

Rent is not down across the board. Losses are mostly concentrated in luxury buildings in four areas: Downtown San Diego (down 2.2 percent annually), University Town Center (down 7.1 percent), north shore cities of Del Mar, Encinitas and Solana Beach (down 4.2 percent) and the south I-15 Corridor with Mira Mesa and Sorrento Valley (down 4 percent).

Meanwhile, a lot of the areas with older, and cheaper, apartments have actually seen rents bump up annually. Chula Vista and Imperial Beach have seen rents rise 3.1 percent, National City is up 3.4 percent and Poway/Santee up 2.7 percent.

Joshua Ohl, CoStar managing analyst, said the rent changes go beyond just job losses. He said the extra $600 a week in unemployment benefits has meant rent in older apartments has stayed remarkably stable, but luxury units largely suffered because they were built around extensive amenities.

He said it’s possible the situation could flip when low-income renters out of work recently stop receiving the extra $600 a week in extra unemployment — potentially making less fancy, older apartments subject to tenants unable to pay.

The San Diego County unemployment rate was 13.9 percent in June, down from 15.2 percent the previous month, but still near historic highs.

The countywide vacancy rate has grown since the March shutdown orders from Gov. Gavin Newsom. In the second quarter, the vacancy rate was 5.49 percent, up from 4.7 percent at the same time last year.

Rents have been dropping nationwide during the pandemic, but like San Diego, it isn’t by much. Zillow said last week the typical nationwide rent had fallen by only $5 in the spring to $1,723 a month.

Source: SDuniontribune by Phillip Molnar