For the First Time, Rents in San Francisco, Oakland & San Jose Fell Simultaneously
After months of steady price increases, Bay Area rents finally appear to have plateaued. This month, all three major cities in the Bay Area – San Francisco, San Jose and Oakland – saw declines in the median price of a one bedroom unit for the first time ever since the creation of our monthly rent reports.
Just as San Francisco rents were the first to see major price increases, they were the first to flatten in February 2016 as well, when prices reached a peak of $3,590 for a one bedroom and $4,870 for a two bedroom. As Bay Area residents were encouraged to migrate away from San Francisco, Oakland and San Jose saw steady rent growth in line with the increase in housing demand earlier this year.
In sharp contrast with historical trends, the median price of a one bedroom unit decreased -2.6% in both Oakland and San Jose, causing both cities to drop down one place in our rankings of the most expensive U.S. rentals markets. Bay Area rent prices appear to have finally hit a natural price ceiling.
The softening of Bay Area rent prices coincides with the recent slow down in tech hiring and funding, but can also be attributed to a maximum amount of rent that people are willing to spend. Nevertheless, San Francisco, Oakland and San Jose remain landlord focused markets, with well-priced units still garnering many applications in a short period of time. In addition, the Bay Area is still home to some of the most expensive cities across the nation, and this is not likely to change in the near future.
Bay Area Rent Trends in Depth
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