Having ticked up a little over 1 percent from the second to third quarter of this year, the weighted average asking rent for an apartment in San Francisco – including one-off rentals as well as those in larger developments – slipped around 2 percent in October and is now running around $4,200 a month, which is around 6 percent below its peak in the fourth quarter of 2015 but 2 percent above its mark at the same time last year with the average asking rent for a one-bedroom now running around $3,600 versus $3,650 in 2015.
At the same time, the weighted average asking rent for an apartment in Oakland has slipped a little under 1 percent to $2,600 over the past month but remains around 9 percent above its mark at the same time last year with the average asking rent for a one-bedroom now running around $2,200 a month (which is now 39 percent less expensive than in San Francisco versus 41 percent less expensive at the same time last year). That being said, the average asking rent for an apartment in Oakland remains around 10 percent below its peak in the second quarter of 2016.
Our trends analysis is based on pricing data from over 3,000 listings.
I just checked one high rise downtown complex that I track each year. In 2016, they were offering a very outdated one bedroom on the 37th floor for January 2017 move in.
They are now offering a completely remodeled (new kitchen, new floors) one bedroom, same floor plate and orientation, on the penthouse floor 5 floors above for the same price for January 2019 move in. Knocking off about $150 for the higher floor, another $50 for it being the penthouse, and a conservative $300 for the complete remodel, it’s down about 11% from January 2017.
I didn’t see much of a drop in pricing last year at this place, but it’s significant this year.
That drop is significantly more than the 6% drop since 2015 and, more apples to apples, is YOY down while rents are 2% up YOY. Interesting. Could it be renters are foregoing more expensive rental units (such as a penthouse) in favor of something nice but not top-of-the-line?
If you’re basing your comment on ‘Tipster’s survey – a laudable effort, but technically still an anecdote – then I would point you to the perils of generalizing …particularly based on small sample size.
More broadly, I’m not convinced of the benefit of a report based on ASKING prices – as opposed to what people are actually paying: isn’t one of the main themes of this blog – aside from the ever present one that Real Estate = Wonderland – that changes in the supply mix change average prices … and obscure the underlying trends? (Of course I guess the benefit is that’s the report that’s available)
You’re actually on the right track as the current average is being dragged down by outsized drops for larger, more expensive, units.
True. I have been able to increase rents on small 425 square foot one bedroom units in San Pablo, CA. from about $1100 to $1400 over last 18 months or so. Basic entry level housing, not ghetto, but not high end by any stretch. Of course there is a shortage of affordable housing, no affordable being built that isn’t subsidized, and perhaps a glut of higher end product built in the last several years.