Rents rocketing up in San Francisco
The Housing Bust Shakes Up Rentals – Yahoo! Real Estate
Saturated Metro MarketsIt’s no surprise that rents are rocketing up in healthy urban job centers with limited room for new apartment construction such as San Francisco, San Jose, New York City, Seattle, and the District of Columbia. But other metro areas with slow job growth such as Denver, Boston, Dayton, Memphis, and Detroit experienced a continuing trend of weak rental growth, according to a ranking of effective rent increases in 2007 for large metro areas compiled for BusinessWeek.com by Manhattan-based real estate research firm Reis (REIS).
[snip]
In other coastal cities where the job market, housing market, and population growth have been robust, rent increases have accelerated. San Francisco was the top-ranked metro area for rent hikes last year. The effective rents jumped 10.3%, to $1,764, in 2007, compared with a 7.7% increase in 2006 and a 3.8% increase in 2005.
Art Swanson, chief operating officer for Lightner Property Group, which manages more than 300 apartments in San Francisco, says tenants in rent control apartments are unlikely to move out, so “a lot of people coming from out of town are paying the higher prices.” Swanson says there’s heavy demand for entry-level apartments, particularly studios, which are commanding higher rents.
“People are looking to take less to spend less,” Swanson says. “They’re being more budget-conscious.”
We’re #1! We’re #1! We’re #1!
Thanks to Burbed reader Anthony for this find!
April 7th, 2008 at 6:54 am
1764 in SF only gets you a broom closet. Good luck finding a 1-1 for less than 2500.
April 7th, 2008 at 8:30 am
Exactly, this should not be surprising. Rent has been lagging for some years, and is out of whack with the housing prices. It needs to move up a few notches to come back to trend. We’re just seeing the beginning.
April 7th, 2008 at 9:33 am
Don’t know whether NobHill is like Tenderloin, but a quick check on craigslist produce this find:
http://sfbay.craigslist.org/sfc/apa/633403540.html
I have to admit this apartment is really small and ugly, there is another one at the same area with $100 more.
April 7th, 2008 at 11:39 am
I found this rental series showing that there was a huge drop (after a steady increase) in HUD Fair Market rent (which is for a “modest 2 bedroom apartment” in 2005.
It’s difficult to find time series on rental costs, I even found an economics paper on the county housing market trying to come up with a model and not using rent as a factor because there were no available series.
April 7th, 2008 at 11:52 am
Studies of rent prices, time series, are needed. I came to the BA in 2003, saw my rent go DOWN, then up a little, then up 23%. I voted with my feet and left, for another complex that was affordable if you don’t mind gang crime, intermittent electrical and phone service, and getting to know the Sunnyvale cops on a first-name basis.
I have finally voted with my feet and left the BA, and will not return until I am sure of being able to make a living, untraceably, with no dependence on the internet, or even on electricity or phone. And I’ll be set up in a “distributed” fashion, live one place, work another, store stuff in another, and finally my official address will be in yet another. This is the way to live in the Bay Area.
Rents going up 20% or more a year is not any more sustainable than house prices going up that that rate, and there will be a rental price crash. The imaginary money is simply going away. I believe from observing Craig’s List, that room rental prices have been going down, and with the disappearance of imaginary money will come the disappearance of a good part of the population. I love the BA, and think it has a future – a realistic future based on what it did about 100 years ago. Some manufacturing, fishing, farming, lots of basic production with a little high tech.
April 7th, 2008 at 7:18 pm
Real Stater said:
>> Exactly, this should not be surprising. Rent has been lagging for some years, and is out of whack with the housing prices. It needs to move up a few notches to come back to trend. We’re just seeing the beginning.
Real Stater,
And where did you get this idea from? What is your basis for stating this gem of knowledge? What historical or other factual chart says so? I want to see one. See! Nada! Zilch! As usual, just a noise coming from your wrong side.
You can go up, go down, do blasphemy to heaven, sacrifice yourself on the housing altar, do whatever you want, the bottom line is that rents are determined by incomes and wage levels (demand side) and availability (on the supply side). Rents have NOTHING to do with house prices BECAUSE NO ONE “HAS” TO BUY A HOUSE, and short of leaving, people can rent a shelter. If rents are high, HOUSE PRICES will follow that, not the other way round. Take a first class in economics before making that noise again.
April 7th, 2008 at 8:02 pm
Take a first class in economics before making that noise again.
———–
You are asking the wrong guy. He gets paid for his ignorance.
All he needs to do is finding some clients who are either equally ignorant or they don’t care about this issue. There comes his commissions.
April 7th, 2008 at 9:30 pm
RentersBeware:
>>And where did you get this idea from? What is your basis for stating this gem of knowledge?
This is not an idea. This is a real trend that’s been happening in the Bay Area for a while now, as demonstrated in the above article. Not sure which island you’ve been living on, but if you pay attention, you’d notice that every few months this matter comes up in the news media. For example, this piece came out in Oct 2007:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/18/BU36SRH4D.DTL
Say, how do I happen to have a link? Because I keep track, and I pay attention every single day.
April 7th, 2008 at 10:02 pm
Rental prices increasing is a real trend. Home prices dropping is nothing but speculation so far. Renters beware; don’t let the rug be pulled under you without you knowing it. If you don’t make the transition to a homeowner, one day you may even afford to stay here as a renter.
April 7th, 2008 at 10:03 pm
Correction:
>>may even afford
should be
may not even afford
April 7th, 2008 at 10:40 pm
Lord, this Real Stater must be have been stuck in the restroom when God was giving out IQ to humans! What a piece of load are you talking about?
You say first:
>> Exactly, this should not be surprising. Rent has been lagging for some years, and is out of whack with the housing prices. It NEEDS TO MOVE UP A A FEW NOTCHES TO COME BACK TO THE TREND We’re just seeing the beginning.
Read the capital parts I have highlighted. And when I ask you “how do you know rents should follow the trend to go up”, your answer is “because I see them going up and hey, I track them!!”. The operative word is “should”. The questions is what is the REASON it should go up to house prices.
What a moronic statement I hear from this guy. It’s like this:
person A: “The weather needs to become warmer in the coming months. I don’t feel warm enough”
person B: Why is that? What is the reason you believe that the weather is below its proper temperature?
person A: Because it is getting warmer!!
Enough said. This guy is hopeless.
April 7th, 2008 at 11:07 pm
RentersBeware,
I have answered both parts of your questions, the first being where did I get this idea from, the second being why rents will go up from here. Read the post again. It’s all there.
April 7th, 2008 at 11:21 pm
MortgageAware: Ah, grasshopper, by understanding another’s failure to understand, you are indeed achieving enlightenment.
Remember the four noble truths of real estate:
1. Real estate means suffering.
2. The origin of the suffering is wanting a better place than you live now.
3. The cessation of suffering is attainable by not going into hock over a stupid house.
4. The path to the end of suffering is not buying beyond your means nor living on a park bench.
April 7th, 2008 at 11:47 pm
MortgageAware: The low IQ is on the one that bites on the troll.
Eversince Pralay set the tone to sustained aggression mode, this forum has crashed to the level of a middle-school fight. I miss the old burbed.
April 8th, 2008 at 12:06 am
Yeah, can’t we all get along?
April 8th, 2008 at 12:30 am
Yeah, can’t we all get along?
———–
Of course you can, provided you don’t start your comment by trashing others as “amateur types”.
http://www.burbed.com/2008/03/29/your-advice-needed/#comment-14954
(Post #8)
April 8th, 2008 at 12:45 am
Rental prices increasing is a real trend. Home prices dropping is nothing but speculation so far. Renters beware; don’t let the rug be pulled under you without you knowing it. If you don’t make the transition to a homeowner, one day you may even afford to stay here as a renter.
————
I love this kind of Realtor-like sales pitch.
Well, shouldn’t it be that way? Renting should be more expensive than owning.
The article provided says:
1. Home price is falling. Due to this reason people are not buying home.
2. Rent is going up because people are not buying home.
So, if it goes like that eventually owning will be cheaper than renting. In that kind of scenario it would make sense to owning a home.
Therefore, there is no reason for “transition to a homeowner” TODAY.
April 8th, 2008 at 1:04 am
Pralay,
What you need to do is to transition your thinking. Somethings are not intuitive:
- Earth seems flat, but is actually round
- Smoking for a few days seem harmless, but will kill you slowly
- Renting seems like an easy way out, but will price you out forever
April 8th, 2008 at 2:27 am
– Earth seems flat, but is actually round
– Smoking for a few days seem harmless, but will kill you slowly
– Renting seems like an easy way out, but will price you out forever
I see you have insufficiently meditated on the koans assigned, and have instead created some false ones that lead to additional suffering. Here are some correct koans to help return you to the 160-fold path.
– In order to practice Zen Realty, you must purchase the house, not purchase the house, and neither purchase nor not purchase the house.
– A monk asked Tozan, “How can we escape the cold and heat?” Tozan replied, “Why not go where there is no cold and heat?” “Is there such a place?” the monk asked. Tozan commented, “When cold, live thoroughly cold in winter; when hot, water your own lawn.
– A monk asked Kegon, “How does an enlightened one return to the ordinary world?” Kegon replied, “A broken mirror never reflects again; fallen flowers never go back to the old branches, and an interest-only ARM will reset in three years.”
– One day Banzan was walking through a market. He overheard a customer say to the real estate broker, “Sell me the best house you have.” “Everything in the MLS is the best,” replied the broker. “You can not find any place that is not the best.” At these words, Banzan was enlightened.
– One day as Manjusri stood outside homeownership, the Buddha called to him, “Manjusri, Manjusri, why do you not enter into a contract? You will remain priced out forever.” Manjusri replied, “I do not see myself as outside. Why enter?”
Sekiso lived and taught in South Sunnyvale, and Kankei lived and taught on Northern Palo Alto. One day, a monk came from 94301 to 94087 in search of teaching. Sekiso said to him, “My Southern Monastery is no better than the Monastery in the North.” The monk did not know what reply to make. When he returned to Kankei and told him the story, Kankei said, “You should have told him that I am ready to enter Nirvana any day.”
April 8th, 2008 at 9:23 am
That was too funny madhaus.
April 8th, 2008 at 9:27 am
What you need to do is to transition your thinking. Somethings are not intuitive:
….
…..
- Renting seems like an easy way out, but will price you out forever
——————
Another NAR propaganda. There is only one salesman in this room who tries to sound too serious and pretends to know everything. And trashes others as “amateur types”.
RE, try to be more creative.
April 8th, 2008 at 9:36 am
- Earth seems flat, but is actually round
- Smoking for a few days seem harmless, but will kill you slowly
————–
Exactly.
- Home ownership in an inflated price seems to be the only way out and “harmless”. But it’s more of a liability in this current housing market condition.
- Don’t be a victim of Tobacco industry. Don’t be a victim of NAR/real estate industry. They are same.
April 8th, 2008 at 10:15 am
Madhaus,
Your adaptation of the Middle Path and the later tale were both excellent.
Please keep the feed flowing. After all, everything about real estate in the Bay Area seems to be about myths anyway.
April 8th, 2008 at 10:20 am
- Smoking for a few days seem harmless, but will kill you slowly
—————
And did I tell you that home ownership can kill you too?
http://www.theindychannel.com/news/14357407/detail.html
http://ezinearticles.com/?Are-You-Committing-Foreclosure-Suicide?&id=996450
OMG, I thought it would be harmless! Just get a NINJA loan FOR FEW YEARS. As “Home Price Always Goes Up”, you can always refinance. Pretty soon you will be wealthy.
Be a macho like Marlboro Man and enjoy “Pride Of Homeownership”.
April 8th, 2008 at 7:56 pm
Madhaus, that was awesome.
April 8th, 2008 at 10:33 pm
Pralay, Mortgage Whatever and Real Estater, can you find a better place to bicker? This is tedious.
I live 30 min from SF and my rent in a great condo with pool, jacuzzi, etc. hasn’t changed in 30 months.
April 8th, 2008 at 10:36 pm
Get the poet out of here too.
April 8th, 2008 at 11:09 pm
Pralay, Mortgage Whatever and Real Estater, can you find a better place to bicker? This is tedious.
————
Come on “me”! Asking me is justified, but you are asking a guy like RealEstater, who was FEATURED many times in Bribed.com, to find better place! Fortunately this topic is not HIS feature. Otherwise you would have to “go elsewhere”.
————
I live 30 min from SF and my rent in a great condo with pool, jacuzzi, etc. hasn’t changed in 30 months.
————
That’s called “out of whack”. Wait for “the rug be pulled under you”.
April 8th, 2008 at 11:39 pm
Bribed.com? Ouch.
If anyone has content they think I should feature, please feel free to let me know!
April 8th, 2008 at 11:51 pm
It’s time once again to expose the lies of the gloom and doom camp. Check out the latest report published by Creekside Realty, which is frequently referenced by the BA media:
http://www.creeksiderealty.com/bay_area_real_estate/2008/summary/4apr.htm
Here are some notable quotes:
>>SCC (Santa Clara County) & SMC (San Mateo County) are both off their record highs but have rebound the past two months. SCC & SMC are back to their March 2007 price levels.
>>The expensive communities (Palo Altos, Los Altos, Mt View, Sunnyvale, Cupertino, Saratoga, Los Gatos and Almaden Valley) are doing well and are at or near their record high prices
(Note: We’re talking about “Real Bay Area” here)
>>Although the volume of SFR transactions improved significantly since mid-January, with SCC improving from 50% to 65% of the normal volume. Despite this significant improvement, only 2001 had fewer transactions initiated. Because of the length of escrows, the volume of closings in March still set new record lows.
(Now we know why sales appears to be down)
>>The demand for housing close to the SMC/SCC border remains strong causing that area to appreciate. The San Mateo – Santa Clara County border tends to lead local real estate market trends.
>>There has been pretty dramatic improvements (reductions) in DUI (days of unsold inventory). Many SCC market areas have seen DUI cut in half.
>>The Mt View, Los Altos and Palo Alto area has only 60 DUI. Los Gatos and Saratoga with 128 DUI. We would consider both of these regions to be a Seller’s market.
>>The hottest price range remains between $1.000,000 and $2,500,000 with only 118 DUI.
IS THERE ANY DOUBT THE REAL BAY AREA MARKET IS EXTREMELY HEALTHY?
April 9th, 2008 at 7:44 am
Do you think the big housing crash and the big earthquake will strike simultaneously to devastate the Valley economy in one shot, or one after the other to prolong the misery?
April 9th, 2008 at 8:40 am
I think terrorists may attack, global warming may flood the land, or you may get rammed by a truck on your way to work, but life goes on.
April 9th, 2008 at 9:25 am
IS THERE ANY DOUBT THE REAL BAY AREA MARKET IS EXTREMELY HEALTHY?
————-
Well, if you remove all the interesting phrases used (like “dramatic improvements”, “improved significantly”) , it does not tell much. After all, this description is coming from a Realtor who would like to tell us homes are “flying through windows”.
The real facts are in the data/statistics (not in Realtor’s description). The change is nothing but seasonal. And it is worse than 2007 year to year data.
April 9th, 2008 at 9:45 am
Pralay,
>>The real facts are in the data/statistics (not in Realtor’s description).
No more excuses. The site has every kind of data for every county, with links neatly organized and graphs plotted! The analysis is based on the data given.
April 9th, 2008 at 9:46 am
Quote of the Day:
>>The change is nothing but seasonal.
(Jeez…is the poet taking note?)
April 9th, 2008 at 9:50 am
No more excuses. The site has every kind of data for every county, with links neatly organized and graphs plotted! The analysis is based on the data given.
————–
And why don’t you look at those data and tell me if they are better than 2007 or not? I already saw them.
April 9th, 2008 at 9:52 am
(Jeez…is the poet taking note?)
———–
Data does not lie. RealEstater does.
April 9th, 2008 at 9:55 am
“Exactly, this should not be surprising. Rent has been lagging for some years, and is out of whack with the housing prices. It needs to move up a few notches to come back to trend. We’re just seeing the beginning.”
Right. Because the guy that delivers your mail (not that you know his name) should either move his family into an efficiency in a tenement or move out of California, entirely.
Well, he could also maybe just sit it out in a tiny place for a bit while the idiots who bought in 2005-2006 and the realtors who rode the wave go bankrupt, then walk in and buy (or rent) from the people that pick up the pieces.
I mean, either way would probably work. My guess your preference is the former.