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Recent article from business insider
Rents are plunging in the most expensive markets
All heck is breaking loose in San Francisco…
>But not because the economy has tanked in the most ludicrously expensive rental market in the US, which it has not. Enormous supply is flooding the market, thanks to a historic construction boom not only of apartment towers but also of condo towers, whose investor-owned units, now that selling them has become tough, are appearing on the rental market.
>Nearly all of the new supply is high end, and it is pressuring the market from the top down.
>The median asking rent – half are lower, half are higher – for a one-bedroom apartment fell 7.9% year-over-year to $3,380, according to Zumper, which analyzes rental data from over 1 million active rental listings in multi-family buildings (it does not include single-family houses on the rental market). For a two-bedroom, asking rent fell 6.6% year-over-year to $4,670. The fourth month in a row of year-over-year declines.
>The last time rents declined year-over-year was in April 2010. In October 2015, the median rent for a two-bedroom had soared 11% year-over-year to a famously ludicrous $5,000, according to Zumper. Double-digit rent increases had been common. Hence the local term for this situation: “the San Francisco Housing Crisis,” when teachers cannot afford to rent a median one-bedroom apartment in the city.
>Even now, rent of $4,670 a month for a median two-bedroom works out to be about $56,000 a year, nearly the median annual household income in the US. Even in San Francisco, not all that many households can afford those kinds of rents. Hence an affordability problem that is turning into a demand problem.
