Having ended last year lower than where they started, asking rents for apartments in San Francisco have ticked up around 3 percent since the beginning of the year, roughly half of which can be attributed to normal seasonality.

And in fact, based on a comparison of nearly 3,000 listings, the weighted average asking rent for an apartment in San Francisco, including one-off rentals as well as units in larger developments, is currently running around $4,100 a month, which is 1.7 percent higher than at the same time last year but 7.8 percent below its peak in the fourth quarter of 2015 with the average asking rent for a one-bedroom running around $3,425 a month having ticked down from around $3,650 in 2015.

At the same time, the weighted average asking rent for an apartment in Oakland has slipped roughly 5 percent since the beginning of the year to around $2,425 a month, which is 2.7 percent below its mark at the same time last year and approaching 19 percent lower than a mid-2016 peak, with the average asking rent for a one-bedroom still running around $2,100 a month, which remains around 40 percent cheaper than in San Francisco.

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Comments from “Plugged-In” Readers

  1. Posted by SFrentier

    I knew when SF gets a cough Oakland will catch a cold. Same for Seattle…just wait. But I’m glad SF rents are headed back in the right direction. Hope this summer’s wave of bright eyed and bushy tailed graduates remains strong. It’ll be a bit of an Arnold moment…I’m baaacckkk!

    • Posted by E.Gonsalves

      Wait until the 7,000 NEW units under construction in Oakland come to market. Oakland doesn’t catch cold from San Francisco. That’s wishful San Francisco centric thinking. There are currently more housing units under construction in Oakland than in San Francisco.

      • Posted by SFrentier

        Now that makes sense: all these new and expensive to construct rentals coming to Oakland as the rental market is softening there. So how does that lead to rents holding up well in “non centric” thinking Oakland?

        • Posted by E.Gonsalves

          New construction=higher rental average prices. SF has a higher percentage of newer housing stock than Oakland. New construction apartments in Oakland start at $3,000 for 1bd room in most downtown locations.

          • Posted by SFrentier

            That wasn’t my point. You’re comparing apples to oranges. Of course more new units will bring up the rent average, as new units generally rent for more than older units.

            My point was that those new units in Oakland are going to end up renting for a lot less than what the owners were expecting (hoping) for. This happened in SF where higher end new buildings took a hit in their rents. My point is that Oakland’s new units will end up taking a bigger hit than SF. And because rents are lower to begin with in Oakland, some of these buildings may loose money.

            The owners in SF are safer because their rents are higher, their drop is less than Oakland’s, and they can sell units off easier in SF vs Oakland.

          • Posted by E.Gonsalves

            Units in Oakland should sell faster than in San Francisco because they are far more affordable to far more buyers. The new units completed so far in Oakland are filling up quickly. Keep in mind that Oakland is also building a significant amount of office space for the first time in more than a decade. This will keep housing in Oakland in great demand.

          • Posted by SFrentier

            As usual, you’re delusionally biased towards Oakland. Just because Oakland is cheaper than SF doesn’t mean it sells faster. They are different markets, and the recent stats from the Marks company shows that condos in SF are selling briskly.

            As for the Oakland office space, let’s see how fast it fills up. SF office space is already very tight with record yields for commercial landlords. Same for all those expensive new condos near the lake and DTO- let’s see how much they drop over the next 2-3 years.

            SF is much more established than Oakland so when we hit a recession we will see how well Oakland holds up with all that new construction. Investing in Oakland is basically riskier because everyone buying new/higher end or retail properties is taking a gamble. A good value added buy is a good value added buy either in SF or Oakland, but the new expensive stuff is much riskier in Oakland. There is simple less there there. Sorry but dems the facts.

    • Posted by Tipster

      This doesn’t mention which direction rents are headed, it only describes the average asking rent, which is now skewed towards new and newer construction, and those usually get higher prices. Rents can be going down, while more new and newer construction gets put up for rent, making the *average* increase while the *actuals* are falling.

      • Posted by SFrentier

        True but I don’t think enough new units are hitting the market in SF now for that. Anecdotally I’ve seen rents stabilize but not really go up. Maybe next year I can finally get a raise for myself. Really depends what happens with the economy. So far inspite of the intense political theatrics most economic metrics are doing well.

        • Posted by Oaklandlover

          Hey sfrentier,

          What’s your take on the local economy? And national and (developed) world for that matter?

          I mean not the economy in the moment as it stands today, but what is coming down the line this year and into next?

        • Posted by SFrentier

          As usual there are a lot of moving parts to consider. Locally of course tech will still be a significant driver given the future technologies we all know about (self driving, AI/robotics, internet of things, etc., etc.). And the limited available housing in prime Bay Area locations will keep prices going higher, though national economic downturns will effect our RE cycles as well. But I’m definitely bullish on SF RE as an asset base for the next 10-20 years.

          Nationally we’re definitely in weird times. Guess the economy loves a republican, because even with the surreal chaos in the White House, businesses, investors and the market sure seem to be chugging along as if nothing strange is going on. Of course cutting down business taxes from 35% to 21%, and the overseas tax repatriation allowances are fiscally huge incentives, no one knows what the impact of the future national debt will be. All I know is that all these factors cry out for some seismic and unknown black swan event. The well know Chinese proverb “may you live in interesting times” is rather apropos I’d say.

          • Posted by Justin

            The stock market has been trending sideways since the beginning of the year… Businesses love the terrible tax cuts they just got and investors love that instead of actually using that windfall to invest in people they’re getting dividends and stock buybacks.

  2. Posted by Pablito

    HUD (Federal Housing and Urban Development) and all the major mortgage banks feel 30% of income is ‘affordable’ for housing. i.e. if households are paying more than 30%, mortgage default rates and evictions escalate pretty quickly.

    so $4,100 a month translates into $13,667 a month – or $165,00 a year in annual income for an Average apartment. Not a Nice apartment – an average one.

    Ooof. I feel for sorry for the kids now days.

    • Posted by SocketSite

      Keep in mind that the “average” apartment measures more than one bedroom in size, with the average cost per room, counting studios as one, currently running around $1,700 per month.

      • Posted by haighter

        Exactly. I’m guessing $5k/mo is typical for a 2bdrm in a desirable neighborhood. Sharing a 2-bedroom at $5000/mo total rent = $2500 per person per month, or $30k/year. That rent is 30% of a salary of $100k, which is on the low end of starting grad salaries in professional/tech jobs in the bay area.

        • Posted by Pablito

          Ah yes. I will be sure to get $2,500 per month of rent out of my kids for the bedroom they occupy. Lord knows they should be making at least $100k a year.

    • Posted by E.Gonsalves

      The $4100 per month on rent would get you an $800,000 home loan, and with 20% down, a nice $1,000,000 single family home in Oakland, with a backyard, in a pretty nice neighborhood.

      • Posted by haighter

        big assumption that someone has $200k cash for a downpayment, or wants to stick around long enough that property ownership makes sense.

      • Posted by Donald

        A $1,000,000 home should not be “normal” anywhere for a family.

        • Posted by E.Gonsalves

          If you are a professional in the Bay Area earning the corresponding wages in a two person working household, $1,000,000 for a home at the current interest rates is probably around 30% of household income. Not a huge stretch for two working professionals in the high salary Bay Area.

          There are still areas in the Bay where you can get a single family home for around $500,000 which working class families with two incomes can afford. Places like Concord, Pittsburgh, Antioch, San Pablo, Richmond, parts of East Oakland, Hayward, San Lotenzo, etc., are affordable to most working families.

  3. Posted by AlamedaRenter

    Saw a guy hunched over on the sidewalk across the street from the Brannan Apts in the picture while going to REI the other day. Had a needle hanging out of the leg and pants pulled down.

    Definitely worth $4,000/month

    I have no idea if the folks that can afford that won’t take a serious look at all the housing being built in Oakland between the Fox Theater and Temescal….maybe they won’t look at those places…but maybe they will. I joe they don’t because Temescal is going to be a really vibrant area (more than it is now) this time next year. Plus amazing access to transportation.

    I used to always say that I’d LOVE to live in SF…not so much anymore.

    • Posted by E.Gonsalves

      Not only Temescal, but also Uptown, Old Oakland, Auto Row/Valdez, etc.. Oakland is a great city which is now absolutely booming.

    • Posted by Donald

      It has seriously fallen through the sewer pipes. Used to live there, now when I visit, I’m embarrassed for what it has become.

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