Bay Area Rents Q32015

The average asking rent for an apartment in a building with at least 50 units in San Francisco ticked up to a record $3,623 per month in the third quarter of 2015, up 2.8 percent over the past three months but only (yes, only) 6.6 percent higher versus the same time last year.

Keep in mind that the average asking rent in San Francisco was 9.1 percent higher on a year-over-year basis in the second quarter of 2015 and 13 percent higher, year-over-year, in the first quarter of the year.

The average asking rent in San Francisco has increased 62 percent since 2009. And the average asking rent for a studio in San Francisco is now $2,976, according to Cushman & Wakefield.

At the same time, the average asking rent for an apartment in the East Bay has increased to a record $2,105 a month ($1,655 for a studio), up 2.7 percent over the past three months and 11.7 percent higher, year-over-year. The average rent for an apartment in Alameda County, which includes Oakland, is now $2,257 per month, up 13.2 percent over the past year.

Average East Bay Asking Rents Q32015

Asking rents for apartments in the East Bay have increased nearly 30 percent over the past two years, higher than anywhere else in the Bay Area. And the vacancy rate for apartment buildings in Alameda County currently measures 2.8 percent versus 4.1 percent in San Francisco.

The current average asking rent for an apartment in San Mateo County is $2,871 per month, up 11.3 percent year-over-year. And the current average asking rent in Santa Clara is $2,623 per month, up 10.7 percent year-over-year.

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Comments from “Plugged-In” Readers

  1. Posted by sassyboyfrisco

    $3,000 sounds good but $3,500 sounds much better!!! Go rent prices, keep on rising!!!

    • Posted by Sierrajeff

      This is unsustainable. I have “a friend” who’s a fairly senior attorney at a national law firm, who pretty much lives check-to-check due to S.F. rent. How others less fortunate live here, I have no idea – two young white collar types were overheard on the 31BX a couple evenings ago talking about getting raises to $40K a year – where do they live, are they stacked 3 to a bedroom in some quasi-hostel somewhere?

      At some point the economic lunacy will start driving people away… I know “my friend”, who hates moving and loves S.F., is nevertheless seriously considering asking for a transfer to another city – e.g. a move to Boston could save over $1,500 * a month* in rent – that’s $18,000 a year that “my friend” could save, while still getting to live in a vibrant world-class city.

      • Posted by jack

        Couldn’t your “friend” just move to Oakland and realize the same $1,500/month savings?

        I am a little surprised that a fairly senior (thinking 7 years plus) attorney at a national law firm not making more than $175,000/yr. Assuming punishing overall tax rate of 40%, this leaves $8,750/month, with rent at (living large) $4,500/mth, I suppose the $4,250 remainder could make you feel check-to-check.

        • Posted by moto mayhem

          my wife is a 2nd yr associate and makes about $200K. A senior attorney would certainly make over $250K in a large firm

      • Posted by Hitman

        It would only be unsustainable if the market was free. This market is not clearing because of government interference. Renters want to get rent-controlled apartments so a few years from now they will have a “steal”. Landlords don’t want to be stolen from. The result is unfulfilled supply and demand. Thank the gang of 4, Peskin, Feinstein, Daly and every other idiot politician that has failed this city.

      • Posted by JR "Bob" Dobbs

        I can see this. Factor in a 401(k) and typical student loan repayments for a fairly recent law grad, and this associate could end up with about $1500/month after rent. That will go quickly — living paycheck to paycheck, and saving nothing for a down payment or anything else. Throw a kid in there with daycare, and finances are now a serious issue even w/ a near $200,000 income. I would move too.

        SF housing cannot go up forever, even if they were never to build another unit here. Two constraints are incomes and the draw of alternative regions. I think we’re close to the max. that could apply. Not saying rents will crash (I don’t think they will) but I certainly would be leery about buying rental property on the hopes that rents will keep rising.

    • Posted by spencer

      A senior attorney at a major firm likely makes >$250k. Shouldn’t be living paycheck to paycheck on that unless extravagant spender

      • Posted by primeminister

        or paying alimony/child support.

        • Posted by san FronziScheme

          or having those pesky noisy things called kids.

          • Posted by Dixon Hill

            and/or educational debt.

      • Posted by Dave

        You forget the huge down payment needed to purchase in SF even if you have a big salary. Most under 40 folks do not have that kind of money.

        ITA with sierrajeff. I am losing my cycling buddy as he is pushing 30, employed in hi-tech and making over 100K, but is living in a rental with two other dudes and this is not where he pictured himself being at – at 30.

        Big income, 125K, but he is single and no way can afford to buy here. He just got a job offer from a Seattle company and is going through the background checks. He is out of here as many tech folks are.

        Agree w/sierrajeff. This is lunacy and saying folks can move to Oakland. Well a number of folks don’t want to. Why not move to Seattle or Denver or Portland. If one is going to move and set down roots. Make a huge life decision.

        This is lunacy as jeff says

        Its crazy when the two huge homes I exchanged for in Ohio (one brand new) are renting for 1400K per and an SF studio is about double that?! Its not like there is no demand in Ohio – both homes rented within a week of going on market..

        That my friends can’t be sustained, and will not be sustained. IMO.

  2. Posted by Hank

    Is there a typo? Why is the cost of a 3BR/2BA less in SF than a 2BR/2BA?

    • Posted by Diverj

      Dogs don’t pay rent

    • Posted by pringles

      Maybe 2BR that also have 2BA are rare and fancy.

    • Posted by taco

      My guess is that there were not enough data points for 3/2 or 2/2 (or both) to stabilize the average

    • Posted by zig

      A 2/2 is usually a modern condo as there was no such thing back in the day so most would be pretty nice

      All those hoods people don’t call the “real” SF have lots of SFHs. Really though I have to think there is not a lot of 3/2s for rent in SF

      • Posted by SFrentier

        3/2’s for rent? I got ’em.

        • Posted by SFCitizen

          SFrentier – Aren’t you the landlord that only does corporate rentals? Tenants that would only stay for 31 days up to less than one year? If so, then I’m not sure your units would be included in these stats.

          • Posted by BayviewSF

            Corporate rental tenants can not stay for more than 1 year? Why? It is just a furnished rental and I thought any tenants can rent a furnished rented for as long as they want.

            Is corporate rental under rent control as well?

          • Posted by SFrentier

            That’s that Fonzi guy. I’m the get property not under rent control and sing all the way to the bank guy 😉

    • Posted by lyqwyd

      It’s probably about the location, 3/2s are few and far between in SF’s core, whereas they are quite frequent in the outer neighborhoods, which are generally more affordable when compared to the core.

    • Posted by san FronziScheme

      2BR/2BAs can be split evenly between 2 single techies and as such are very desirable.

      Also, 3BD/2BAs are more rare in large buildings and therefore we could have a statistical oddity at play.

      • Posted by SFrentier

        Yeah any survey that only reports on 50+ Unit bldgs that purports to represent the overall state of SF rentals is pretty lame.

  3. Posted by Dave

    It makes sense Oakland/East Bay had the biggest percentage gain and SF the smallest. The East Bay has the lowest average rental costs and SF the most.

    With Santa Clara and San Mateo falling in between.

    I an surprised Santa Clara has th highest vacancy rate but I’ve also read they are building lots of rental housing and such there so that may be a factor.

    The closeness of SF and Oakland make Oakland ripe for more rental gains compared to SF and with easier building times there hopefully the move of folks from SF to Oakland will not cause too big an uptick in rents. All the proposed new projects there should allow Oakland to strike a better supply/demand balance.

  4. Posted by DM

    Come the next downturn, crash, bubble burst, or whatever you want to call it – here’s one thing you can count on: Rents won’t fall proportionally. Landlords acting in their own interest (as is their right) will hold their units vacant awaiting the next upswing.

    Remember the dot.com bust? A ride on the 37 Corbett whisked you past dozens of For Rent signs. Sadly, since the inception of Reaganomics 30+ years ago, incomes have failed to keep pace.

    • Posted by san FronziScheme

      Yet incomes pay for rent. Magic!

    • Posted by sfcommie

      Huh? I guess you [weren’t renting] in 2009 when you could knock off $400 just by asking. Vacant units don’t generate income and the landlords are not irrational.

      • Posted by Alai

        Might be different in rent-controlled units and non-rent-controlled units.

  5. Posted by johny

    There is not going to be a burst in the near future. This is the new normal. Even if things flatten or drop by 10-15%, there is not going to be a burst IMHO. I doubt rents for a 1 bedroom will ever go south of 2800 again.

  6. Posted by Some Guy

    Yeppers. It works like this peeps: The first dot-bomb crash was due to overexcitement around a little baby industry.

    This time around there are hundreds of millions of smart phones, if not billions, and every single phone needs $apps$ to add value. Picture a sizable chunk of the fractional income from hundreds of major, really major apps (OOber, Liffft, for pay games, etc.) funneling into the bay area and now into SF proper.

    Think about it: Are smartphones a fad, or are they now part of the fabric of society? The phones are only going to get smarter and the apps on them better and mo powerful. This is probably the new normal. 2BD/1BA fixer shacks in Fruitvale going for 325 and up, get’em while you can.

    • Posted by Michael

      Exactly! That’s why all those mansions in Detroit are still so damn expensive and it’s an alpha city!

      Think about it: You think cars are a fad, or are they now a part of the fabric of society?

      • Posted by Sierrajeff

        Thanks, I have had a rotten morning, and your response made me chuckle…

      • Posted by Some guy

        Not a relevant comparison. App-based companies are in the service sector, not the industrial sector. All they need is office space, worker bee housing, and brain power. Now, given the nature of leading edge computer (app) programming, that brainpower needs to be higher-end and will have correspondingly higher-end tastes in climate, topography, air quality, food, urban arts and entertainment amenities, etc. S’why the tech hive decided to swarm and the swarm landed in SF. Where else would it have, really?

        Oh and BTW I think Detroit’s heyday lasted 5 decades. If SF’s new heyday lasts two that’s enough to dub it “the new normal.”

        For penance you must now go *listen* to: “The Normal – Warm Leatherette” Find it on youtube.

        • Posted by Sierrajeff

          There are plenty of people in Austin who’d love to debate you… and plenty of people in San Diego who bet their money on biotech for many of the reasons you cite above, only to lose their shirt. Is S.F. going to sink into oblivion in the next 5 years? Of course not. Is even Oakland going to supplant S.F. due to its lower costs? No, that’s silly. But could these rents be an unsustainable bubble that results in material negative impacts on the S.F. economy and quality of life? Absolutely.

        • Posted by Jake

          The “swarm” settled in silicon valley 40-60 years ago and has been flourishing ever since. SF’s tech industry is as much a spillover from the south bay as Oakland’s offices are a spillover from SF. You might notice that those GHz chips warming your pocket are not the first generation of the fruits of photolithography to multiple. SF bears stains from previous silicon-boomtime spills dating back to at least the 1980s.

          FWIW, SF has a more varied economy than the valley but less room for expansion. That’s why a relatively small boom, like 10-20k/year jobs, has a big impact on the housing costs, while a tech bust hits the valley harder than SF. It is also why the really big tech companies HQ in the south bay.

          And any thought that SF is “the place” for programming is idiotworthy. Despite our coldwater beaches teaming with great whites braving the riptides, plenty of world-class programmers resist the draw and remain in god forsaken wastelands like Pittsburgh, Texas, Boston, and even Portlandia.

          Besides, in SF the dominant service industries are tourism, health care, education, and the city’s oldest profession: building permit expediters.

          • Posted by Dave

            SF is benefiting from Silicon Valley which is the driver of the Bay Area economy.

            SF is not a diversified center of anything anymore but health care and government. Tourism – like that generates sustainable wages for those in the industry.

            As you say, there is little room for expansion here if companies even wanted to expand here.

            I am high on Oakland as their is room for expansion and the potential of it to move out and challenge Silicon Valley as the hub of the Bay Area. f Oakland can grow a diversified economy and continue rapidly expanding its housing stock it will ultimately be a healthier business center than Silicon valley. For those two reasons above all.

        • Posted by SFrentier

          Don’t forget, big part of the reason the “rents so damn high” in SF is due to rent control. Everyone that’s benefiting (and that’s the majority of renters, as they have been 3+ years and are below market rent) is gonna continue to suck at the nipple of discounted rent, to the chagrin of new entrants. That’s exactly why rents don’t often go down in the city. There is always someone who wants to, and can, pay the new market rent. The city is a unique place (unlike the rest of the bedroom communities in the Bay Area) and there are always people with workable situations (trust funds, lotsa cash, family owns property here, roommate connection, add a bunk bed in an alcove, donate a kidney, etc., etc.). Ain’t no different than most world class cities folks. Gotta pay to play, or go get ya a ‘workable situation’…whatever it is.

      • Posted by san FronziScheme

        Yes, it could (and probably will) happen in the Bay Area. It’s still a coastal area with ideal climate and will stay that way since knowledge workers get to choose their region, whereas Detroit popped up at a time when Michigan and Ohio were the places to expand your industry. It was accessible from NY and Philly by train and had lots of good cheap land.

        • Posted by Jake

          sFS, “Michigan and Ohio were the places to expand your industry” because they are located between the iron ore of Minnesota and the coal of Pennsylvania. And the industries expanding in those times were heavy industries. The reason Detroit became the largest auto center instead of nearby Cleveland or Toledo was due to some local boys, including Henry Ford and Ransom Olds.

          If you want to know why HP, Intel, Apple, Google, et al are in the valley lookup Frederick Terman and William Shockley. Why is Microsoft in Redmond and not in NM where it started or the valley?

          BTW, most people think socal weather is better than bay area weather and there is a lot more contiguous land in the LA basin than the Santa Clara valley. Also, cheap land is for farmers, not industrialists. Industrialists need raw materials and each other, which for the software industry are one in the same.

          • Posted by moto mayhem

            weather is much much better in bay area than soCal. not even close

          • Posted by Jake

            moto, most people think socal weather is better than bay area weather, and it’s not even close. My personal opinion of the two climates and your personal opinion of the two climates won’t change that.

          • Posted by moto mayhem

            really, thats hard to believe, but to each his own i guess. Most of SoCal is miserable in the Summer

          • Posted by Some Guy

            SoCal: two words – air quality?
            Actually make that four: global warming.

          • Posted by Jake

            you live in the Richmond district and call socal summers miserable? the average high in LA in the summer is ~80 F, which is lower than San Jose or Santa Rosa. No mountains between the LA basin and the ocean. The interior valleys of CA are hot everywhere in the summer.

          • Posted by What?

            I just forwarded this thread to friends in Santa Monica, Newport Beach and West Los Angeles who thought it was quite funny. Unlike the Bay Area boosters who pretend Coastal Southern California is miserable, it actually might be the most perfect climate in the United States. When I lived in Laguna Beach , winter temperatures were from 66 to 72, and summer temperatures were at from 70 to 76 on average.

          • Posted by Jake

            if you are looking for bad air, try being just downwind of the port of oakland and the large truck depots there.

            LA tech companies can locate near the ocean, either on the santa monica/west la side or the newport beach/irvine side.

            FWIW, in high-tech, LA has a larger defense-aerospace industry than the Bay Area. Bay Area has a larger computer industry (processors to hardware to software).

            And since this thread was in part about cell phones, Qualcomm is a San Diego company.

            I think the one-third of the bay filled in has much to worry from sea level rise. Those who live on landfill…..

          • Posted by moto mayhem

            average summer temps in richmond are 66-74 in daytime and 58-66 at night. It was foggy less than 10 days this summer

            I call that perfect.

          • Posted by Jake

            moto, I thought you were a scientist. Surely the average high temp is not an 8 degree range. Surely.
            So, the Richmond had an anomalously mild/low-fog summer. Good for SF. Move 200-300 miles down the coast and you can have that summer much more frequently.

          • Posted by Jake

            moto, Richmond’s average high/low temps for August are 68/55, for Sept 70/55, per weather.com. By comparison, for Santa Monica, the ave high and low for Aug and Sep are 71/63.

            The bigger difference is that the coldest month in Santa Monica is about the same temperatures as the Richmond in May. Their entire year is like your 6 best months, and with less fog and warmer ocean water. Nearly eternal moto-rated perfection.

            Again, the reason the computer industry is concentrated in the silicon valley has more to do with Terman and Shockley than weather or land prices, though I’m sure the weather didn’t hurt.

          • Posted by Alai

            I seem to recall reading about tech companies which were trying to locate to Santa Monica, and which were running into significant problems in terms of finding real estate. Trouble is, it’s not much cheaper than here.

          • Posted by SFrentier

            This weather debate is hilarious. Yes LA has more “ideal” weather, but most Bay Arenas don’t want to live there, just like they don’t lust for fake blond hair. It’s culturally different. That’s the biggest factor, otherwise there is tech already happening in Venice and Santa Monica, but those areas aren’t exactly a bargain, so it’s not a money savings advantage. Same same, but different.

    • Posted by mwsf

      When you start hearing the “this time it’s different” and the “get in while you can” arguments its a sure sign that a given cycle has peaked.

  7. Posted by soccermom

    What is the source for this data?

    • Posted by SFrentier

      Misleading lame data. only 50+ unit bldgs.

      Does. Not. Represent. Most. SF. Rentals.

  8. Posted by Homer Jay Simpson

    salaries are out of control – as we all know the best way to make money is to cut payroll, and if you’re paying your fools big pay just to rent some crappy little place in SF, you can save money by moving the drones to somewhere else and cut payroll. Suddenly everyone thinks you’re a genius, and SF’s “new normal” becomes a liability. But by then SF will have been ransacked, so who cares?

    • Posted by frog

      I think the “drones” would argue with your characterization of them as “drones.” In general, I’ve found techies to be more intelligent and more worldly than most of the “real SF” that many people want to save. Who are these techies anyway? Burners? The guy on a motorized skateboard I saw heading into Zynga a couple of hours ago? Or anybody who is somewhat affluent and under the age of 40?

    • Posted by SFrentier

      Ha ha. Dream on, buster.

  9. Posted by timtucker

    I did a quick audit – typed in craigslist studio SF. There are a few studios over or at $3000.00 per month but a majority are $1900 to $2500. I’m calling BS on the the average being $3000.00 per month. Yes – living in SF has become very expensive but you can still find apartments out there. Keep building more units – will only make it cheaper here.

    [Editor’s Note: The key line above and footnote in the tables: “…asking rent for an apartment in a building with at least 50 units” (which tend to be newer and with amenities).]

    • Posted by BayviewSF

      Very misleading stats which will be used by many people for many different agenda. Useless stats should be discarded before it misinforms everyone.

      • Posted by SFrentier

        That’s what I’ve been screaming above! These lame ass “50+” rental stats have been around for years, and everybody continues to misuse them. Geez, I though we were all smarter than that around here…

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