Last week I noticed an article posted on MSN Real Estate titled “Rents take big jump in 3rd quarter”. In San Francisco, rents have always been damn high anyway – but with more buyers afraid to buy these days (and yes, there are plenty of qualified buyers out there reading the doom and gloom articles and waiting for them to come to fruition before they decide to spend money in San Francisco Real Estate) rental inventory is going down, and as is typical with supply and demand – rental prices are going UP!
The article points out that “The biggest rent increases came in more expensive coastal markets, where home prices have escalated over the past several years. Here, Chandan says, buyers are nervous about sliding prices, but are also put off by the continued lack of affordable housing and the rising interest rates on the jumbo loans required to purchase houses”
So instead of buying, they’re renting. And this increased demand for rentals in San Francisco has lead to an 8.4% jump in rental prices from a year ago to $1,811 on vacancy of 4.1%. This is second ONLY to New York City whose rents rose 9.1% from last year with 2.2% vacancy.
Other places the article mentions with huge increases in rental prices over last year? “San Jose, Calif. (8.8%); Seattle (7%); Orange County, Calif. (5.6%); Fairfield County, Conn. (4.6%) and northern New Jersey (4.8%) — all areas with pricey and somewhat limited housing stock.”
Coincidentally, these are ALL places where the sky still hasn’t fallen out of the real estate market. Homes in ALL of these cities are still selling, foreclosures rates are much lower than the country in general and the job market is strong. Hmm. I think this might be more than just a coincidence.
The latest statistics from SFRentStats show median rents increasing for all but 3BR properties. My guess is that those that can afford between $3500-4000 a month in rent would rather buy than rent, but that is pure speculation on my part with no data to back my opinion up.
If you have opinions, either about the SF Rental Market or about the SF Real Estate Market, I’d love to hear them.