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Wednesday, April 25, 2012

San Francisco Rents "On a tear"

by Calculated Risk on 4/25/2012 08:35:00 PM

From the San Francisco Chronicle: S.F. rental market on a tear

The Wall Street Journal wrote recently about renters eyeing to live in San Francisco scrambling and begging to sign a lease. ...
Some ran as short as 15 minutes, with crowds of other would-be tenants vying for sometimes lackluster digs. One 600-square-foot loft in the South of Market neighborhood that was “just basically a massive kitchen” listed for $3,200 a month, he says. Still, people were competing for the owner’s attention to submit a rental application.

They were “backing him into a corner to see who could talk to him first…I thought there was going to be a fistfight.”
While rents in other parts of the country are rising around the pace of inflation, at 2.7%, the average rental price in San Francisco shot up by 15.8% from a year ago. Landlords are seeing the demand and acting accordingly, looking to mark up rents significantly when they can.
San Francisco rental-home owners and brokers say they are being deluged with applicants for apartments that would have barely gotten a nibble a year or two ago. Some property managers say they are boosting rental prices by 30% to 40% when units turn over.
It’s always been more expensive to buy than rent in San Francisco, but it looks like the rental market is starting to make up some ground.
Manhattan and San Francisco are both very tight markets, but rents are rising in most areas - and rising rents eventually help support house prices (that is why I track the price-to-rent index).