Is San Fran’s Rent Dip Enough to Make it Affordable?
If January’s numbers are any indication, it could be a good year for San Francisco renters. According to RENTCafé’s most recent market report, the coastal city is one of only a handful to see a year-over-year dip in rent costs — a surprising feat, since San Fran’s rents hit historic highs over the last decade. But it’s true: rents decreased nearly a full percent from January 2016 to January 2017, down to an average of $3,378 per month.
The drop is likely due to a serious influx of apartment units in 2016, a year that saw the city gain nearly 10,000 new units — 126 percent more than the year prior. One-bedrooms, in particular, saw a decent drop in San Francisco, declining more than 2 percent since January 2016.
Though the slight drop in rents is probably a relief to San Franciscans — as well as those considering a Westward move — it’s still not enough to knock S.F. off the nation’s highest rents list.
In January, San Francisco had the second-highest rents in the country, coming in right behind Manhattan. San Fran’s rent is also about 2.5 times higher than the national average, which was just $1,315 for the month. Since San Francisco is now seeing industry and resident spillover from Silicon Valley, the higher-than-average rents come as no surprise.
Unfortunately, San Francisco’s dropping rents are about the only bright spot on California’s real estate radar, as nearly every major city has seen a recent (and significant) jump in rent. Sacramento, Stockton, Long Beach, Riverside, and Los Angeles all had big rises, with Sacramento’s taking the cake: its rents climbed more than 12.5 percent in just one year.
But don’t let California’s market get you down; in fact, the national apartment market is in a pretty good place. Though the average national rent grew by $5 dollars, it’s not likely the trend will continue. A flood of newly built apartment units should expand inventory and temper rent growth in many of the nation’s biggest cities.
If you’re really looking to save on rent in 2017 though, make the West or South your destination. Tulsa, Oklahoma, and Corpus Christi, Texas, both saw year-over-year drops in rent, and some of the country’s lowest average rents were seen in these regions, too, including Memphis, Tennessee ($718/month); El Paso, Texas ($750/month); Tucson, Arizona ($773/month); and Albuquerque, New Mexico ($814/month). The two most affordable cities were Wichita, Kansas ($626/month) and Toledo, Ohio ($658/month.)