Down, down, down go the rents.
So they tell us.
Last month, San Francisco had the slowest rent growth of any city in the U.S. — down 3.6 percent from a year earlier. According to a new study by the RentCafe website, San Jose (down 0.7 percent) and Oakland (down 0.5 percent) joined San Francisco on a list of the 10 cities with the slowest growing rents in the nation.
“February’s numbers do spell an improving market on the horizon,” the study said.
But then it splashed some cold water over its Bay Area findings: After all, rents remain astronomical with tenants paying an average of $3,342 in San Francisco (second highest in the U.S., after Manhattan’s $4,094); $2,548 in San Jose (sixth highest in the U.S.) and $2,394 in Oakland (seventh highest).
And yet… a trend is a trend. Bay Area rents, according to most reports, have been slipping for months. (And, at least anecdotally, there are relative bargains to be found these days — the numbers from RentCafe and other data crunchers don’t necessarily reflect smaller complexes or apartments with mom-and-pop landlords.)
Looking at the national picture, RentCafe offered a few possible reasons for the slide:
“It seems the recent increase in new construction is creating volatility in the apartment market, cooling down rents across the country,” it said. Nationally, “rents dropped by $9 in February, reaching $1,306 on average… while historically tight markets like San Francisco, Houston, Boston, San Jose and New York all saw average rents drop as well.”
RentCafe noted that “recent construction has also led to a surplus of luxury units in many major metropolises, and that means a loosening market there, too.”
Rents didn’t dip everywhere, however. In fact, eight California cities made the website’s list of the 20 cities with the fastest growing rents in the nation.
Stockton was No. 1 on the list, with average rents up 12.3 percent year-over-year to $1,017, while Sacramento was No. 2, with rents up 10.7 percent to $1,196. Also in the Top 20 were Riverside, Anaheim, Fresno, Long Beach, Los Angeles and Chula Vista.
Feeling desperate? For affordability, try moving to Wichita, KS, which has the cheapest average rents in the U.S. ($629), followed by Toledo, OH ($661), and Tulsa, OK ($667).
And now, read RentCafe’s report here.
Photo: A San Francisco street corner. (Eric Risberg/AP)