Having suddenly dropped 4 percent in September to its lowest level in a year, the average asking rent for an apartment in Oakland has since dropped another 3 percent to $2,400 per month, which is 7 percent lower than at the same time last year, 10 percent lower than prior to Covid, nearly 20 percent below its 2016-era peak and the lowest average asking rent in two years, none of which should catch any plugged-in readers by surprise.
As such, the relative discount in asking rents between Oakland and San Francisco, which had dropped from around 34 percent prior to the pandemic to 24 percent in the first quarter of 2021, has just ticked back up to…34 percent, with the average asking rent for a one-bedroom apartment in Oakland having just slipped back under $2,100 a month versus back under $3,000 in San Francisco.
At the same time, the number of apartments listed for rent in Oakland continues to climb and is now 30 percent higher than at the same time last year, as are increasing inventory levels in San Francisco, with nearly 50 percent more studios and one-bedrooms on the market and local employment down, facts that aren’t “bearish” or “pessimistic” in nature but key to understanding and forecasting actual, versus AspIrational, trends in rents, values and development returns.
Our analysis of the rental market in San Francisco and Oakland is based on over 200,000 data points going back two decades, not just a few years, that we maintain, normalize and index on a monthly basis. We’ll keep you posted and plugged-in.