Bay Area rents are declining…not surprising given the rise in unemployment and struggling economy.
The trend is alarming if you are a landlord. Especially if you are like most small-time investors with a handful of properties that barely cash-flow.
From The San Francisco Chronicle Apartment market moving on up
Bay Area landlords might not be entirely thrilled, having seen their rents drop by an average of 7.5 percent over the past year, compared with 3.7 percent nationwide, according to the report, based on figures up to Sept. 30. Still, not so bad in light of the 17.3 percent increase they enjoyed over the past four years. In San Francisco, rents dipped 5.6 percent over the past year – studios and one-bedrooms showing significant drops – compared with an overall 26.4 percent increase in the past four years.
San Francisco tenants might not be over the moon either. Averaging $2,270 a month, their rents are among the highest in the nation, and considerably more than the rest of the Bay Area, including Marin. But before you give your landlord 30 days’ notice, be warned that Marin’s 95.9 percent occupancy rate is even higher than San Francisco’s, according to the report ( www.realfacts.com).
Anything over 95 percent occupancy, which San Mateo also enjoys, is considered “healthy,” said RealFacts co-founder Sarah Bridge. Not so healthy are Santa Clara, Alameda and Contra Costa counties, with higher vacancy rates. Santa Clara County’s whopping 10.1 percent decline in average rents was among the worst in the country. A glut of overpriced apartments resulting from the tech downturn is the explanation.
All in all, “apartments are looking pretty good,” said Bridge. “Landlords are adjusting their rent levels to what is affordable.”
