San Fran­cisco rents rise 14.8%

Prices climb 5.3% in L.A./Or­ange County and 3.7% na­tion­ally in March from last year.

Los Angeles Times - - BUSINESS - as­so­ci­ated press

Home rental prices are ris­ing across the na­tion, but they’re soar­ing in San Fran­cisco.

Prices na­tion­ally climbed a sea­son­ally ad­justed 3.7% in March from 12 months ear­lier, real es­tate data firm Zil­low said Wed­nes­day. Rents in South­ern Cal­i­for­nia climbed a bit faster than that, up 5.3% in the Los An­ge­les/Or­ange County mar­ket and up 4.5% in the In­land Em­pire.

The in­flux of tech money sent San Fran­cisco rents up 14.8%, while nearby San Jose jumped 12.3%. Rents av­er­age more than $3,000 a month in th­ese ar­eas. That’s roughly $600 more than rent in the Los An­ge­les area, $800 more than metro New York City and $1,000 more than the Wash­ing­ton, D.C., area.

Prices are also climb­ing in cities with­out the same in­flu­ence from start-ups and ven­ture cap­i­tal. Rents rose more than 8.5% over the last year in Den­ver; Louisville, Ky.; Kansas City, Mo., and Nashville, among other metro ar­eas. In many cases, de­mand for apart­ments and rentals have out­stripped the avail­able sup­ply of rental homes and apart­ments, caus­ing prices to rise.

But other ma­jor cities are see­ing a glut of rental prop­er­ties. Prices have fallen over the last year in six of the United States’ 100 largest metro ar­eas, in­clud­ing Chicago, Min­neapo­lis, New Or­leans and Rochester, N.Y.

More Amer­i­cans have shifted to rent­ing in the wake of the 2008 fi­nan­cial cri­sis and the hous­ing bust, which caused an avalanche of fore­clo­sures that de­pressed prices through 2012.

At the end of last year, 36% of Amer­i­cans rented. That’s up from 31% be­fore the Great Re­ces­sion, ac­cord­ing to the Cen­sus Bureau.

Even though home prices have steadily re­cov­ered, the monthly costs of own­er­ship re­main cheaper than rent­ing. The monthly pay­ments from own­ing a three-bed­room house are cheaper than rent­ing a com­pa­ra­ble prop­erty in 76% of U.S. coun­ties, ac­cord­ing to hous­ing data com­pany Real­tyTrac. The anal­y­sis re­leased in April ex­am­ined 461 coun­ties with at least 100,000 peo­ple and suf­fi­cient hous­ing data.

“From a pure af­ford­abil­ity stand­point, renters who have saved enough to make a 10% down pay­ment are bet­ter off buy­ing in the ma­jor­ity of mar­kets across the coun­try,” said Daren Blomquist, vice pres­i­dent at Real­tyTrac.

But in­comes have failed to keep pace with the rise in home prices or rents, mak­ing it dif­fi­cult for many to save for a down pay­ment. Av­er­age hourly wages have risen just 2.1% over the last year.

Justin Sul­li­van

RENTS AV­ER­AGE more than $3,000 a month in the Bay Area, roughly $600 more than the av­er­age rent in the Los An­ge­les area, real es­tate data firm Zil­low said. Above, a home for lease in San Fran­cisco.

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