The SFGate’s recent report that the median rent in San Francisco has hit “a ridiculous $4,225” is factually wrong and borderline reckless.
From the report:
“We already knew the rent was too damn high, even before we published a report this February showing not only that the median for a one bedroom apartment in the city had jumped to $3,460, but that even formerly cheaper neighborhoods were now among the pricey…
Apparently though, they weren’t high enough. According to Zillow, the new median rent in San Francisco is $4,225 a month. Zillow’s data compose the “Zillow Rental Index” (ZRI). This index shows rents up 16% year-over-year (YOY) this April, and take into account all types of rentals in San Francisco proper, from single family homes to condos to in-laws.”
Zillow’s Rental Index is based on estimated, versus actual, rents. And while the index does take into account the estimated rents for single family homes and condos in the city, it doesn’t include…apartments.
Once again, Zillow’s index and the “median rent” of $4,225 in San Francisco, as reported by SFGate, does not include apartments.
As we reported last month, the average rent for an apartment in San Francisco, based on actual asking rents and actually taking apartments into account, remains around $3,450 per month, up 2 percent since the end of 2014 and 13 percent higher versus the same time last year.
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SF gate has become a laughable almost tabloid style website over the last couple years, and especially noticeable over the last year. It seems to cater to all the fresh newcomers to the area with all sorts of “30 things to do” “best 20 restaurants” or “you know you live in the Marina if” or “we dont call it frisco because”
Its such a joke. It used to be a decent website….
Thank you socketsite for keeping true over all these years and keeping the facts straight. Please continue!
Something about their website — probably some ad or analytical add-on — crashes my computers all the time. I just avoid it entirely now.
Yeah, forget about browsing it on a mobile device. Every single article crashes over and over. Misspellings everywhere, silly Buzzfeed style slideshows that require you to click 30 times to read an article. No thank you. The Chronicle is still a decent paper though.
you should browse on a windows phone /s
absolutely true. SF Gate is one of the worst news websites in the world. Barely works. Acts like program was written by a 10-year old.
They make the Daily Mail look like the New York Times.
And with half the city renters paying $500-1500/mth the average rent is probably something way less than $2.5k/mth.
It’s only the stuff that become available that pricey. More regulations = less rentals, = higher prices.
But those renters still keep voting for more of the same stuff. Thanks guys!
True in theory. Average rents in the Peninsula often exceed SF. Even in SF, non rent controlled areas such as Soma typically fetch more than rent controlled units in the Mission do.
The only downside to the renter is being locked in. It’s too costly to move to a similar sized unit.
I think, as well, it includes all properties (but not it seems apartments!) including those that will never be part of the rental stock e.g. the big Pac Heights (or Noe valley now!!) SFHs etc..
I wouldn’t even trust SF Gate to get the winning lottery numbers correct.
SF Gate is less reliable than the Onion
Real estate boosters always whine that rent control drives up rental prices because when a rent control unit becomes available for a new tenant, landlords will take advantage of that once-in-a-lifetime event to spike rents as high as possible as a hedge in anticipation of a long term tenancy. If rent controlled apartments were included, then median asking rents would most likely be higher than for non-rent controlled units.
Landlords always charge as much as they can for a given unit. Rent control has nothing to do with that. Do you honestly think average rents would go down without rent control?
Yes, it’s called the law of supply and demand.
Low supply and high demand equals higher price.
High supply and low demand equals lower price.
Price change occurs at the margin, in this case, free market rate apartments. A negative side effect is deterioration and dilapidation of property as owners are disincentivized to reinvest in cash losing property or don’t have the funds even if they did wish to improve.
Inevitably, this leads to new construction of only luxury apartments as these are the only projects that don’t lose money. Simultaneously, low-income housing will further deteriorate as no one will build or improve facilities for this segment. Meanwhile, municipal funds shrink as property values, artificially depressed do not keep up with inflation or spending to include social welfare programs. This results in higher taxes to cover the inevitable large housing projects when social engineers decide to “fix” things. Welcome to the Welfare state.
higher taxes? is someone proposing repeal of Prop 13? holding my breath, figuratively.
Otherwise, mostly agree with your post, though SF has had and does have some construction of new non-luxury residential RE. Also, there used to be much more federal money for low income housing and urban housing and transit development. Then Reagan gutted the programs and the GOP has been able to resist restoration ever since. Local governments have never had the resources to make up the difference, but they are amenable to political pressure, leading to overreach and creating inappropriate laws with poor outcomes. This is really a bad adaptation to the removal of a cornerstone of the Welfare state by the GOP. Welcome to Reaganomics.
If it doesn’t include occupied rentals, what it really captures is median asking rental price, whatever the class of units. No one cares about actual data, it’s all religion at this point.
All data on Zillow is suspect and is only as good as the knowledge of the programmer writing the analytic code. Of course, SFGate will use the flawed data as hyperbole to increase page views.
What is your methodology that give the $3,450 number then? I followed the link but could not find any information.
I think he’s using RealFacts, which he referenced in an October posting; “Keep in mind that RealFacts statistics are based on a survey of institutional buildings with at least 50 units, buildings which tend to offer amenities beyond the walls of the apartments and are prime candidates for corporate rentals and tenants with relocation packages.”
A cursory search on CL (craigslist) now yielded the following one bedrooms:
TL: 2095
US (union sq): 3900
Castro: 4200+
RIchmond: 3200+
Again, just a cursory glance, please don’t hold my feet to the fire on this. Just what I saw. There were more expensive places too, like in Pac Heights
Thank you for publishing this. I’ve been shocked at the number of my friends posting the $4,225 number, it is just reckless and wildly misleading and flat out wrong. Zillow has notoriously awful data, troting the higher number around is simply yellow journalism. Both NEMA and Rincon Tower 2 are on the market with average asking rents in the $4200-$4400 range and they are brand new towers.
except for the fact that I know people looking for apartments and these places are asking $4500+ for a sh!tty apartment in a sh!tty location. Regardless of whether its $4500 or $3500 – both are still outrageous! It is ridiculous when a well paid tech employee like myself is terrified that my landlord is going to raise my rent for a 3rd time in a row and this time it will be to a point where I can’t afford it but I also can’t move because there is nothing else available.
How far are you willing to commute for work? I’m being serious. Also the RIchmond is cheaper. If you work in SF, look into the N Bay or East Bay near BART. GL to everyone looking for housing. Fortunately we bought at almost the bottom of the market about 5 years ago. GL everyone!
How about doing something scientific for a change?
According Wai Yip Research, the [median] asking rent for a one bedroom in San Francisco is estimated to be $3276. Wai Yip Research gather data by polling craigslist rental listings. The data and calculation is available here.
Thank you.
Editor: what is your source for the $3,450 figure? Is it RealFacts? If so, is it true that RealFacts data is based on a survey of only institutional buildings with at least 50 units?
Yes that’s how real facts do their survey, and yes $3,450 is realfact’s number. Pierce-Eislen is another source and they are around $3,250 for SF’s median. The number are all over the place. If you factor in rent control units and look at the actual median people are paying and not the current asking rents, the median is probably somewhere in the $2,500-$3,000 range. All these data companies do 50+ unit buildings so they skew towards highly amenitized non-rent controlled buildings.
$4,200 or $3,400 – i do feel there is a missed opportunity here for SF.
Campos does not have half the style of Jimmy McMillan.
it feels off to me. I rent a 1 bedroom apartment in SF for $1170 per month.
Don’t blame Zillow for people misusing the data.
This type of number is called Owners Equivalent Rent (OER). It’s an estimate of what peoples homes would rent out for and essentially how much rent an owner is “paying himself”. It’s useful for separating out the consumption and investment parts of home ownership and looking at home valuation. What it isn’t useful for is looking at the rental market, because the home and rental markets are different with different sizes and quality of stocks. Which is why OER is used for looking at the home market because, for example, looking at home prices vs apartment rents is misleading.