For Lease in Pacific Heights

According to a query of over 1,400 active listings for apartments in San Francisco and Oakland, including one-off rentals as well as units in larger developments, the weighted average asking rent for an apartment in San Francisco is currently running around $4,100 a month, which is 5.6 percent below the weighted average asking rent at the same time last year and 7.9 percent below a peak of closer to $4,450 in the fourth quarter of 2015.

In Oakland, the weighted average rent for an apartment is currently running around $2,550. And while that’s still not cheap, it’s roughly 5 percent cheaper than at the same time last year and 8.4 percent below its peak in the fourth quarter of 2015 as well.

Comments from Plugged-In Readers

  1. Posted by SFAgain

    Are rent prices an accurate leading indicator for home purchase prices? I know the two generally correlate, but does rent lead the way?

    • Posted by sfcommie

      All things being equal, they should correlate since they are substitute for each other on demand side, and the rent is the ROI for the price on the supply side. They certainly did correlate since the great recession. And rent should lead price since rising rent forces renters to buy. But accurate? probably not. There are so many other factors and the change in rent won’t have an effect on the price unless the change is lasting.

  2. Posted by Mutal Kudi

    That landlord strike is really working, huh? They really showed those renters who’s boss.

    • Posted by anon

      “Striking” or refusing to rent your units at the peak is/was ridiculously stupid. Rent control costs you nothing when rents are dropping. And how hard is it to get a tenant to leave when they are paying over market rent? You can still pass through CPI increases even when market rents are dropping if you want to force the issue.

  3. Posted by EcceMorons

    FWIW, I’ve re-rented units in SF last month that got the same price as they did in late 2015. No increase, no decrease. Less applicants, but ultimately, same price.

    • Posted by sfcommie

      That’s probably because your units were reasonably priced to begin with. The unit next door to mine was left empty for 8 months. They raised the price last summer and then returned it back to 2014 level in the fall. It finally got rented yesterday. And it was just about the most reasonably priced apt in the city too. Meanwhile, I’ve been seeing a few kickass deals on 2 br units throughout the city.

  4. Posted by Dave

    By itself its hard to say how significant this is. How have rents fared this past year in other metro areas? Are they generally down and, if so, does the rent fall-off in SF/Oakland closely match that of other metro regions?

    One wonders how much AirBandB and other such arrangements may be a factor in this. In my area a growing number of owners are renting out rooms to unrelated adults. One home close to me has 4 such adults renting bedrooms and sharing the living areas. Two of the individuals moved from apartments in SF to this arrangement and are saving a significant amount of money. .

    Beyond that, apartment developers will take this trend into account in whether they propose new projects and/or back out of existing entitled projects.

    • Posted by shza

      I would think your AirBNB scenario would drive up rents, if anything, since they would be shrinking supply for the market of people who don’t want to just rent a room in some stranger’s apartment.

    • Posted by anon

      “How have rents fared this past year in other metro areas?” S.F. rents down more than any other large U.S. city.

      • Posted by Dave

        Thanks for the link. One factor is clearly that rents have outpaced incomes in SF. There is only so much even a techie can cay or – increasingly important – is willing to pay.

        The median rent in Seattle is around 2200/month yet the tech salaries there are not too much less than in the Bay Area. Personally I know of a dozen well paid young techies who have got transfers out of the Bay Area or outright just moved out of the region without a replacement job in the past year and a half or so. Most of them could afford to pay the high rent but simply were unwilling to. Not to mention some of them had to pay extra for parking.

  5. Posted by JayJay

    Rent’s are bound to decline, especially in SF, where rent’s doubled in less than 5 years, but incomes didn’t.

  6. Posted by SFAgain

    We’ve been renting in SF for the past few years as we decide where to live. We’re in a 3 bedroom home and our rent dropped 9% a couple of months ago without even asking. Before that it went up 7% two years in a row (we didn’t ask for that either).

  7. Posted by observant neighbor

    Apples? Mix?

    • Posted by jwb

      Could be mix. I’d like to hear about vacancy rates, if they are non-zero.

  8. Posted by SF_Landlord

    Sounds about right. Had an apartment in the Mission that rented for $2,950 in Aug 2015. Leased it for $2,750 in Jan 2017.

    • Posted by SFCitizen

      Was this the same unit? If so, you had a tenant that moved out after only two years? Is this property under the Rent Ordinance? Have we reached a level with rents that even with the Rent Ordinance pricing controls we don’t have lifetime tenancy?

      • Posted by Jake

        In SF the average tenancy in rent-controlled units is 3 years longer than for non-rent controlled units (9 years vs 6 years), as SS reported some time ago. Nevertheless, this unit turnover might have been due to the end of a lifetime tenancy.

      • Posted by SF_Landlord

        Correct same unit. Was under rent ordinance. Prices are higher now so there isn’t as much incentive for tenants to hang around forever I think.

        • Posted by curmudgeon

          rent control only becomes an absolute straight jacket (for both landlords and tenants) after 10 years or so, normally. And of course people move for all kinds of reasons. A friend of mine is a small landlord with small studio/1br apts. He says his largely young renters get married, have kids, get transfers, whatever long before they become permanent residents with low rent control rates, so he has very regular turnover.

  9. Posted by skflsndf

    So the average one bedroom goes from $3,500 to $3,220. Still not affordable to most.

  10. Posted by Pero

    The difference between SFH prices and condo rents/prices is that they are not perfect supplements. Most condos have 1-2 bedrooms, while houses have 3 bedrooms, 2baths (or more). Most new condo supply is in the range of 0-2 bedrooms, so the availability for 3 bedroom units has not expanded much. In a perverse way, more small condos can drive SFH prices further up, as they bring in more young professionals that later in life compete for a limited amount of family housing in SF. We should have a better picture in early summer, following the spring house shopping season.

    • Posted by Pero

      The are not perfect substitutes, not supplements

  11. Posted by Pero

    Also, I believe the demand for condos in SF is quite elastic. As rents fall, less people rent in Oakland. As rents fall, less tech jobs are being shipped to Portland or Denver.

    • Posted by E. Gonsalves

      SF rents have gone down more than rents in Oakland. The rental market is much softer in SF than in Oakland. The supply is much tighter in Oakland due to fewer units coming on line and Oakland’s popularity. Everything about Oakland’s desirability as a city doesn’t always have to be about San Francisco.

      • Posted by 101

        This has nothing to do about popularity or desirability. It is plain supply and demand.SF overbuilt and is still building so the rents are coming down to fill those rentals. Oakland virtually built nothing the past five years in comparison to SF so naturally people who could not afford SF ventured over the bridge to the East Bay. The desirability is still in SF compared to the East Bay.

        • Posted by E. Gonsalves

          That’s such an SF-centric argument. The fact of the matter is that 70% of people who relocate to Oakland are NOT from San Francisco.

          • Posted by Jake

            If true this is an astonishingly large figure: ~30% of Oakland’s new residents moved from SF. By comparison, ~8% of SF’s new residents (those that live in SF now and one year earlier lived somewhere else) are from all of Alameda County, per the US Census ACS. I hadn’t realized how dependent Oakland was on the population outflows/overflows from San Francisco. Thanks for the fact (hopefully not alt-fact), EG.

          • Posted by E. Gonsalves

            I hadn’t realized what a huge percentage of people were leaving San Francisco for Oakland. Thanks for putting it into context for us.

          • Posted by Jake

            Ah, but I didn’t list what percentage of SFers move to Oakland. You’ve again misconstrued, as is your want. FTR, the percentage of SFers that move to anywhere in Alameda County (including Oakland) each year is about 1%. More than 6 people move into SF for every SFer that moves to anywhere in Alameda County. And SFer’s are twice as likely to move to Marin or San Mateo Counties as Alameda County, population adjusted. The context is clearly that people priced out of the wealthier counties of SF, SM, and Marin; settle for the Paris Hilton of the Jersey side of the Bay.

        • Posted by SFRealist

          San Francisco did not overbuild.

          The city has under built for decades. The last couple of years have been better, but the reason San Francisco is so expensive is that we did not increase our supply of living units

  12. Posted by SFRealist

    There’s also all the new housing that’s opened in the last couple of years. It’s maybe not a lot by the standards of most of America, but considering how little housing we built for decades, this has been a significant change.

  13. Posted by pablito

    Affordable housing is a good thing.

  14. Posted by Mystery Realtor

    I’m getting about 5% this year for units I’ve been leasing out.

  15. Posted by E. Gonsalves

    I think this article explains pretty well the relationship of the housing situation in Oakland vs San Francisco. The article states that as of at least 6 months ago Oakland is by far the hotter market.

    • Posted by moto mayhem

      its hotter because its cheaper. when the prices get too high in SF, people at some point become willing to move to oakland.

      • Posted by Jake

        yup, which is exactly the example given in the bloomberg article linked to by EG.

    • Posted by anon

      That article relies completely on median price and “over asking” to infer “hotness”. Very flawed methodology.

  16. Posted by Jimmy The House Flipper

    OOh! The cycle is turning! Good thing I have a couple mil socked away from the sale of one of my companies … in 2-3 years, this is going to be like shooting fish in a barrel… again.

    • Posted by anon

      2-3 year peak to trough would be very quick for a RE cycle, No? I’d guess more like 5-6 at least

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