Cap Rate in San Diego, CA

2026 Market Overview for Real Estate Investors

Avg Cap Rate

3.5%

#48 of 50 markets

Median Home Price

$820,000

Purchase price

Median Monthly Rent

$2,600

$31,200/yr gross

Rent-to-Price Ratio

0.32%

Below 1% rule

Cap Rate Rating

Low

Below average return. Common in high-appreciation markets. You are betting on property value growth, not cash flow.

Market Snapshot

Population	1,386,932
5-Year Population Growth	+3.0%
Median Household Income	$85,000
Vacancy Rate	4.2%
Property Tax Rate	0.73%($5,986/yr)

Investor Takeaway

San Diego is a lifestyle market with military, biotech, and tourism employment anchors. Very tight supply keeps vacancy low, but high prices mean most investors need significant capital or creative financing.

Quick Math

Estimated annual numbers for a median-priced property in San Diego, CA before financing:

Annual Gross Rent$31,200

Less Vacancy (4.2%)($1,310)

Less Property Tax (0.73%)($5,986)

Less Est. Insurance + Maintenance($16,400)

Estimated NOI$7,504

Implied Cap Rate0.9%

Estimates based on median values. Insurance + maintenance estimated at 2% of home value. Actual results vary by property condition, neighborhood, and management.