Paragon has issued its May 2014 Apartment-Building Market Report, which surveys the San Francisco metro area (San Francisco, Marin and San Mateo counties, with 138,600 existing apartment units). Bottom line: with an improving economy as well as population and employment on the rise, rents are climbing and vacancy rates are declining.
According to Reis, which provides updates and forecasts of trends in the real estate world, “Residential rents continue to grow fastest in the markets with the best underlying metro-level economies. San Jose, San Francisco, Seattle and Oakland-East Bay, all markets heavily influenced by the booming technology sector, were the top four markets by effective rent growth over the past twelve months.”
All 19 submarkets in the San Francisco and Oakland metro areas saw gains in asking rents, with Reis predicting further increases of 3.4 percent to 4.3 percent by year’s-end. Of course, the most ferocious market here is in our fair city of San Francisco. The latest census data finds that the estimated increase in the city’s population since 2010 was 32,000, with the number of employed city residents jumping by 56,000 over the same period.
However, the number of new housing units added since 2010 was only about 4200. With household sizes averaging 2.3 people, more than 22,000 would-be renters are seeking housing that simply doesn’t exist. This, more than anything, is the most serious driver of rent and home price increases.
Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email firstname.lastname@example.org. www.ceceblase.com