The weighted average asking rent for an apartment in San Francisco was effectively unchanged in January, holding at around $3,450 a month. On a year-over-year basis, however, the average asking rent was 3 percent lower than at the same time last year.
As such, the average asking rent in San Francisco is still 15 percent lower than prior to the pandemic and over 22 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 inched up to around $2,950 per month but 4 percent lower than at the same time last year, 16 percent lower than prior to the pandemic and 20 percent below peak.
At the same time, the number of apartments listed for rent in San Francisco ticked down 5 percent over the past month but remains 5 percent higher than prior to the pandemic, with local employment trending down, facts that aren’t “bearish” or “pessimistic” in nature but key to understanding and acting on the actual market trends, none of which should catch any plugged-in readers, other than the most obstinate, by surprise.
Keep in mind that our analysis of the rental market in San Francisco is based on over 190,000 data points going back to 2004 that we maintain, normalize and index on a monthly basis versus relying on a few years of data or “recollections.” We’ll keep you posted and plugged-in.
I would love to see a chart showing the number of completed residential units of year in SF against the weighted average asking rent for an apartment in SF over time. I know that new starts / new permits on construction are way down recently, but projects that broke ground in 2021-2022 are still coming online today. Obviously COVID/remote work etc etc is a factor, but how much is new supply?
Those who make less than $150k are still priced out of *renting*
No, they are not.
sf: here’s some context for the above, just in case you haven’t been following along closely to the threads here.
SFRealist gets away with quips asserting, with no supporting evidence, claims about whether or not people will be priced out or not, cost-burdened or not because unlike almost everyone else commenting here, and long-established Federal and State standards for housing affordability, SFRealist simply doesn’t accept the rule of thumb that someone should not spend more than one third of one’s gross income on housing.
Once you’ve breached that ≅ 33 percent barrier, it’s quite easy to convince yourself that quite a few people who are highly-compensated and are for practical purposes priced out of the market, aren’t.
I’m citing the fact that thousands of people in San Francisco who earn less than 150K rent here. They are, factually speaking, not priced out of renting. (Math note: an average rent of $3450/month means that there are thousands of apartments which cost less than that. If you want to save on rent, you can pay $3000/month, or $2500/month, which would mean they would be even below this imaginary rule of thumb.)
And don’t take it personally, but I have no idea what you wrote yesterday, much less what you wrote last May. Thanks for keeping track, though.
The point from last May appears to be that the amount needed for “basic necessities” does not scale with income, and so the one-third rule of thumb does not universally hold. Is that a radical position? If person A makes $60k a year and spends half on housing, there is $30k left for the basics. If person B makes $600k and does the same, there is $300k remaining. Are the two equally housing-burdened?
Wow, thank you for actually reading, understanding, and saying it better then I could. 🙂
$2950/mo should be doable on a $150K salary. thats less than 25% of income. But that is the average for 1 bdr, and you can find a 1bdr for under $2200 in the city
And how does that $150K compare to the salary of an S.F. renter? Is a $150K salary “doable”?
Well, as we have discussed countless times over the years here, we can use the San Francisco Mayor’s Office of Housing and Community Development’s table showing incomes in relationship to the Unadjusted Area Median Income (AMI) where any casual observer can see that $150K is between 150 percent and 160 percent of the median 1 person household.
It is important to keep in mind that median rents and median incomes are not independent variables. They tend to cause each other.
150k earners tend to have student loans and car payments, so that is at least $1k/ month there. Add on federal and state taxes, that’s another 40% of your income canceled out.
If those were your only 2 expenses (which obviously isn’t true) that leaves you with $6500/ month which lands around 50% of reported average $3450 rent. And that is if you live off of dirt, never put gas in your car, no savings, no retirement contributions, no entertainment, no medical bills, no dining out, internet and cell phone, no electricity or heat (you get my point)
In your scenario, this person has no obligation to pay $3450 per month. There are plenty of cheaper places available.
This person should also pay more attention to their taxes, because they should not be paying 40% of their income. 35%? Sure. 40%? No.
Yes there are plenty of cheaper places… outside of SF. Thanks for helping to prove my point.
I just searched on Zillow for apartments for rent in San Francisco with a maximum price of $2600 per month. There are 849 available apartments on Zillow alone, all in San Francisco.
Total taxes on $150k of income in 2023 is ~$50k, for a blended tax rate of 32.5% (https://smartasset.com/taxes/california-tax-calculator#PPFrFECfzd). That leaves $8400 a month for all the things.
Sales tax is another 9%
Do you pay sales tax on rent?
What is the average square footage for apartments included in the rent dataset?