Steep price increases, low availability, and rent controls are conspiring to make it an uphill battle for those looking to live comfortably in the San Francisco Bay Area. This month’s rent price report reflects the boom times that the region enjoys.
While rent vs buying is on the minds of many hopeful homeowners across the U.S., those in the San Jose San Francisco Bay Area might be resigned to the belief they can never own their own homes. And home ownership is lowest in California. For Sale inventory is constrained which means Bay Area residents have to search desperately for a place to rent.
The prices of homes in San Francisco are typically the highest in all of the country with nearby San Jose close behind. And rental availability is the big issue for renters in SF.
Vacancy Rate Still high in the Bay Area
According to a report in Forbes, residential vacancy in San Francisco is down to 3.7% and in LA it’s 3.8%. Compare that to the 6.0 % vacancy rate in Chicago, and 5.5% in Pittsburgh, and you can see constrained availability of housing is the number one driver of high housing prices everywhere.
It’s not easy anywhere, yet San Francisco’s rents are persistently high, which is good news for investors but not so much for the city’s stressed workers.
Reports have it that prices and rents are going to keep on rising because payroll data shows strong growth in wages in the region. See the San Francisco housing market report, multifamily housing report, and the US rental market report for more perspective on the rental price outlook.
Rent Prices in the Bay Area
The average rent price in San Francisco is highest in the nation, and now at $3441 as compared to $3355 per month last year at this time. A small but not insignificant increase of 3% YoY.
As you can see in this graphic from Rentcafe, 3 bedroom apartments rent at $5159 per month. That represents an astonishing price jump of 13% in just one year. 2 Bedroom apartments rent for $4382 per month, 1 bedrooms go for $3258 per month and studios at $2453 per month. Rents for less than 3 bedrooms have fallen YoY.
The priciest places to rent in San Francisco are Mission Bay at $4060 per month and South Beach at $4022 per month. The least expensive neighborhoods are Hayes Valley at $2764 per month and Van Ness Civic Center at $2808 per month.
Most Expensive Rents in San Francisco?
The most expensive rental home in San Francisco is a 4734 sq ft townhouse on S Van Ness at $18,476 per month.
3 bedrooms in Nob Hill: $8,442
3 bedrooms in Downtown District 8 — North East: $8,085
3 bedrooms in Telegraph Hill: $17,000
2 bedrooms in Presidio Heights: $6,741
1 Bedrooms in Mission Bay: $3,711
Studios apartments in Mission Bay: $3,276
Last months rise seems steep at 3% yet Los Angeles rents grew 5% and rents in Oakland rose 6%. The high cost of housing and rentals in SF Bay Area is a serious issues, causing many people to start fleeing the region. In fact, calls for rent controls are believed to be on the rise yet some studies found that rent controls actually result in higher rent prices.
However, with construction on the rise, some feel rents should begin to fall.
In a report in the Mercury News, John Protopappas, president and CEO of Oakland-based real estate development company Madison Park Financial Corporation, predicts this will be the start of a major slowdown in the Bay Area’s rental market. He believes rents will decrease 20% to 30% in the next few years as hundreds of thousands of new housing units are completed in Oakland.
However, given that wages are expected to rise continuously in San Franciso County, the rise in rent prices might never cease.
Is San Francisco one of the best cities to invest in real estate? It has a fantastic economy yet the cap rates are the lowest in the nation.
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See also: HOA Software | Los Angeles Rent Prices | Property Management Software | Apartments for Rent | Renters Insurance| 2018 Rental Housing Market | Apartment Rental Prices | Best Cities to Buy Investment Property | Texas Rental Housing| Reduce Tenant Turnover | Property Management Software | How to Screen Tenants | Millennials in Business | Real Estate Portfolio Tips | Starting a Property Management Business | How to Use Property Software | ManageCasa Cloud Based Property Software
Originally published at blog.managecasa.com.