The website credits growing incomes and an increase in single-family rental prices are driving indicators.
"After about a two-year slowdown, rent growth is starting to pick back up across the nation," Aaron Terrazas, Zillow senior economist, said in a release. "The slowdown in rental appreciation, combined with consistent income growth, gave renters some reprieve from worsening rental affordability over the past few years.
"But as rental growth begins to catch up with income growth, affordability will deteriorate, placing a squeeze on budget-constrained renters."
That increase is likely to extend into 2018, especially in areas where employment increases. Rental price are expected to drive home sales as well.
"More widespread rent growth could mean home buying demands stay high, as renters who can afford it move away from the unpredictability of rising rents toward the relative stability of a monthly mortgage payment instead," Terrazas added.
In November, San Diego's median home value sat at $560,800, according to Zillow. Over the next year, that rate is expected to jump 4.2 percent. However, San Diego's housing inventory is expected to also drop 25 percent over the next year.