While the cost of capital has climbed, back to an average rate, the weighted average asking rent for an apartment in San Francisco proper has now held firm at roughly $3,600 a month for the eighth month in a row.
At the same time, the number of apartments listed for rent in San Francisco continues to climb and is now 30 percent higher than at the same time last year and at a two-year high, with over 40 percent more studios and one-bedrooms on the market and local employment down, key facts that aren’t “bearish” or “pessimistic” in nature but simply reality and shouldn’t catch any plugged-in readers by surprise.
While local landlords have been trying to hold firm on rents and returns, with the average asking rent in San Francisco only 2 percent lower than at the same time last year, the average asking rent in San Francisco remains 12 percent lower than prior to the pandemic and 19 percent below its 2015-era peak of nearly $4,500 a month, with the average asking rent for a one-bedroom in San Francisco having slipped back under $3,000 per month, which is 15 percent lower than prior to the pandemic and 19 percent below peak. And once again, inventory levels are climbing.
Keep in mind that our analysis of the rental market in San Francisco is based on over 170,000 data points going back to 2004 that we maintain, normalize and index on a monthly basis, not simply a few years of data or agents’ recollections. We’ll keep you posted and plugged-in.