SF Rental Market is Getting Unliveable

In San Francisco, the median rental price for an apartment reached $3,295 in June 2013. During this most recent quarter in San Francisco, a one bedroom will cost you $2,795, a two bedroom $3,875, and a three bedroom $4,750.

One Bedroom Price by Neighborhood

Ranked by Price as of June 2013

RANK NEIGHBORHOOD $
1 SOMA 3,475
2 Financial District 3,395
3 Russian Hill 3,200
4 Pacific Heights 3,100
5 Lower Pac Heights 3,013
6 Marina 2,900
7 North Beach 2,800
8 Potrero Hill 2,800
9 Noe Valley 2,800
10 Nob Hill 2,788
11 Cole Valley 2,770
12 Castro 2,700
13 Civic Center 2,700
14 Laurel Heights 2,695
15 Mission 2,675
16 Alamo Square 2,673
17 Haight Ashbury 2,588
18 Hayes Valley 2,573
RANK NEIGHBORHOOD $
19 Western Addition 2,500
20 Lower Haight 2,495
21 Lower Nob Hill 2,464
22 Twin Peaks 2,400
23 Bernal Heights 2,385
24 Inner Sunset 2,300
25 Panhandle 2,250
26 West Portal 2,250
27 Glen Park 2,150
28 Inner Richmond 2,000
29 Ingleside 2,000
30 Tenderloin 1,873
31 Richmond 1,750
32 Sunset 1,650
33 Visitacion Valley 1,650
34 Bayview 1,550
35 Excelsior 1,400
36 Portola District 1,350

Rents aren’t just high in San Francisco, they’re rising quickly. In June 2011, the median price for a one bedroom was $2,195. Two years later, the price of a one bedroom has increased 27% to $2,795. During the same time period, the price of a two bedroom apartment rose 33%. That’s almost 10 times the rate of inflation during those two years.

Nearly all rental apartments in San Francisco are getting more expensive. But some neighborhoods are getting more expensive faster. The neighborhoods that are increasing in price the fastest are the ones that used to be somewhat affordable like Civic Center, Bernal Heights, and the Mission.

Price Increase by Neighborhood

2011 vs. 2013

RANK NEIGHBORHOOD 2011 1BR 2013 1BR  % CHANGE
1 Civic Center $1,850 $2,700 46%
2 Bernal Heights $1,683 $2,385 42%
3 Mission $1,900 $2,675 41%
4 Nob Hill $2,000 $2,788 39%
5 Western Addition $1,795 $2,500 39%
6 Visitacion Valley $1,200 $1,650 38%
7 Haight Ashbury $1,895 $2,588 37%
8 Glen Park $1,600 $2,150 34%
9 Noe Valley $2,097 $2,800 34%
10 Cole Valley $2,075 $2,770 33%
11 Lower Nob Hill $1,850 $2,464 33%
12 Panhandle $1,700 $2,250 32%
13 Inner Sunset $1,775 $2,300 30%
14 Twin Peaks $1,900 $2,400 26%
15 Castro $2,150 $2,700 26%
16 Tenderloin $1,495 $1,873 25%
17 SOMA $2,800 $3,475 24%
18 Inner Richmond $1,625 $2,000 23%
19 Sunset $1,350 $1,650 22%
20 Lower Pac Heights $2,503 $3,013 20%
21 Lower Haight $2,100 $2,495 19%
22 Hayes Valley $2,195 $2,573 17%
23 North Beach $2,400 $2,800 17%
24 Potrero Hill $2,400 $2,800 17%
25 Marina $2,495 $2,900 16%
26 Richmond $1,525 $1,750 15%
27 Financial District $3,000 $3,395 13%
28 West Portal $1,995 $2,250 13%
29 Portola District $1,200 $1,350 13%
30 Bayview $1,400 $1,550 11%
31 Russian Hill $2,895 $3,200 11%
32 Alamo Square $2,440 $2,673 10%
33 Laurel Heights $2,500 $2,695 8%
34 Excelsior $1,350 $1,400 4%
35 Ingleside $1,950 $2,000 3%
36 Pacific Heights $3,250 $3,100 -5%

So, what’s happening in San Francisco exactly? Well, good things mostly. In January 2010, the unemployment rate in San Francisco was 10.1%. By April 2013, the rate had plummeted almost in half to 5.4%. In just the first four months of 2013, the San Francisco unemployment rate fell 22%.

San Francisco Unemployment Rate vs National

So more people who live in San Francisco have jobs. The population is also growing. From 2000 to 2010, 28,500 new San Franciscans arrived in the city. From 2010 to 2012, the city welcomed another 20,600 inhabitants in just three years. Many people have ascribed this growth in San Francisco’s population to its surging technology sector.

While demand for housing has increased, the supply of housing is relatively fixed. This causes prices to rise. In San Francisco last year, only 269 new units came on the market. In 2011, The US Census put the vacancy rate of apartments in the San Francisco Bay Area (including Oakland and surrounding suburbs) at 4.1% versus 7.4% nationally. If you’re lucky enough to have a rent controlled apartment in San Francisco, you’re staying put, which further tightens the supply of apartments available for rent.

The supply of apartments is fixed in the short term, but can increase once developers buy land, get permits, secure financing, and construct a new apartment building. If you walk around upper Market Street, you’ll notice there’s actually a lot of new apartment buildings under construction. Due to new construction, it’s estimated that about 8,000 new units will come on the market between now and 2015.

Conclusion

Thinking about moving to San Francisco? Need to get a new apartment in the city? Here’s a sobering tool that will calculate your rent by neighborhood and number of bedrooms. Hopefully you like having roommates!

From Pricenomics

Comments are closed.