San Diego’s Spring 2026 market for 1–4 unit properties shows cautious optimism: strong long-term fundamentals remain, but rising supply and modest rent softening have created more negotiation leverage and value‑add opportunities. Median rents are largely flat year-over-year, vacancies are slightly higher, and cap rates for small multifamily properties sit in the low‑4 % to low‑5 % range. Investors should target properties with lower vacancy risk, focus on renovations or improved management to boost cash flow, and prioritize neighborhoods with stable employment drivers like universities, biotech, and military, as rent growth may remain modest in the near term.