San Francisco rents rise 14.8%
Prices climb 5.3% in L.A./Orange County and 3.7% nationally in March from last year.
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.
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.