While the average asking rent for a market-rate apartment in San Francisco has hit a record $3,400 a month, up 9.8 percent over the past year, the largest percentage increase has occurred in Oakland where the average rent now measures $2,500 per month, up 17.6 percent over the past twelve months. But there could be some relief in sight for renters in San Francisco. And growing pain(s) for those in the East Bay.
With a strong pipeline of new developments racing to hit the market in San Francisco, and at a pace which will ramp-up over the next 18 months, the apartment vacancy rate in the city has ticked-up for the second quarter in a row to just under 5 percent and the pace of rent increases has slowed. And with rents having increased far faster than incomes over the past five years in the city, Cassidy Turley is continuing to forecast “an inevitable slowdown” in San Francisco rents.
At the same time, the vacancy rate for apartments in the East Bay has dropped to a record low of just under 3 percent and the development pipeline in the East Bay is a few years behind San Francisco’s. As such, expect rents in the East Bay to continue to climb, and at a rate which will likely accelerate in the near-term, driven by those fleeing more expensive markets around the bay and a likely in-migration of employers.