San Francisco’s rental prices rose 5.8 percent in the last year, to an average of $1,858 per square foot, the highest in the nation, according to the National Association of Realtors.
That’s the highest rate of rent increases in the U.S., according to data compiled by realtor.com.
That makes San Francisco the second-highest-valued city in the country, behind New York, which was also the nation’s highest-valued rental market in the past year.
But the rent increases have come at a steep price: The average monthly rent rose 5 percent from a year earlier, according the NAR.
That includes a 10.6 percent increase in monthly rent in July, according a report by the San Francisco Planning Department.
The median monthly rent for a two-bedroom apartment in San Francisco is $1.931 per square feet, according Rentrak.com, and the median monthly price for a three-bedroom in San Franciscos market is $2,054.
In the last quarter, the median price for two-bedrooms rose 13.5 percent from the same quarter a year ago.
The city’s median rent for an apartment with three bedrooms was $1 and the average rent for one bedroom was $2.52.
But rent growth is likely to continue this year, and experts say rents could reach $3,000 by the end of 2019, the year that the city’s sales tax hike takes effect.
Rentals are already up 5 percent over the last six months.
“I don’t think people understand how fast rents are rising,” said Michael Mennin, a realtor and president of Mennins Real Estate Agency in San Rafael.
“There’s still a lot to be done before we get to the point where you can get people to move out.”
The city has seen a big increase in the number of vacancies in the rental market, according of Rentrak, and rents are going up even more rapidly than sales.
Last month, the number that listed rents for a one-bedroom home rose 9.4 percent to $1 a square foot.
That was up from the 9.1 percent increase that was reported last month.
The vacancy rate is one of the highest for the city, at 2.6%.
Menni said the average monthly rental is $750, but that’s a very high price for someone in San Fran, where median income is only $50,000.
The San Francisco Renters Union estimates that San Francisco renters pay an average rent of $2 a square feet for a unit of less than four bedrooms, according, Rentrak data.
Mennini said that rents are up in other cities, too, and that rents in Los Angeles, Boston and New York are higher.
“You can see rents in Seattle are going higher, and Portland is up,” Mennino said.
“People are paying more for rent in some places, but in others it’s still pretty good.”
Rentals also are rising more quickly in the suburbs, which have a smaller population and are often poorer.
But San Francisco and its neighbors are also the fastest-growing rental markets in the United States, according TOJO.
“We’re getting older and we’re moving out, and we see the need for new housing,” Mertens said.
Renting in San Jose is not an option for many people, especially those in the middle income bracket, Mertin said.
But it’s not clear why it is.
“The people who are moving out of San Jose are doing so because it’s a more affordable market, which is really good news,” Meehan said.
He said he’s surprised to hear that rents have grown as much as they have in the Bay Area.
“For people who want to stay in San Mateo County, it’s probably a little disappointing, because there are a lot more people moving out there,” Mannin said, adding that rents will likely remain at the same level for the next couple of years.
The housing market is “very fluid,” Meben said.
The rents have gotten so out of whack that Menno and Menninnis are looking for a solution.
“A lot of the problems that we have in San Diego are still there in San Bernadino,” Minkin said about the median income gap between the Bay and San Mateos.
“In San Francisco, we don’t have that gap, and in San Juan, there are other problems, and they need to address that, too.”
The cost of living has increased even faster than rents, which has driven up costs of housing for people with lower incomes.
Renters who earn less than $30,000 a year are facing an average cost of $3.17 per square yard of housing, according data compiled at realtors.com by realtor.com