Ask anyone standing in line for an open house, smiling wryly at the 30 other people competing to rent a San Francisco apartment — it’s not fun.
With tech workers flocking to the Bay Area again and the homeownership market still sluggish, local demand for rental housing is spiking and prices are on the rise, according to new data gathered by Novato-based RealFacts.
The combination of factors is driving people to choose — and then beg — to rent. The occupancy rate in The City rose 6 percent between 2010 and 2011 — meaning there are fewer apartments available on the market — and the average cost of all rentals went up from $2,214 to $2,422, according to RealFacts data.
Sarah Bridge, owner of RealFacts, theorized that members of Generation Y just don’t want to be tied down in the real estate market, especially not in the suburbs.
“That demographic is moving more toward rentals in a tight-knit, walkable community,” Bridge said.
The new data matches what countless apartment hunters already know. Even if you have the credit score report and boilerplate rental application in hand to try to beat out the competition — and especially if you’ve already given the 30-day notice on your current place — life is not getting easier for The City’s potential tenants.
That clock is ticking for 29-year-old nonprofit employee Allyse Heartwell and her tech worker boyfriend. After the couple suspected they had been outbid by other tenants on a place they really liked, they decided they would fight back at some open houses on Wednesday.
“If we like the place, we are going to bid $100 up,” Heartwell said, adding that she tried to bid $50 over the asking price on a previous place, but to no avail. “It’s like they should start putting these places on eBay.”
Because the couple’s options are narrowed by the fact they have a dog and are interested only in certain neighborhoods, they see some of the same people at the open houses.
“We definitely smile at each other, but we don’t really chat with them,” she said. “You just go for 15 minutes, then you have to leave to get to the next one.”
Abigail Glynn, a broker with Davis Realty Co., said she’s noticed a resurgence in The City’s rental market. She said the demand is no surprise, considering increased hiring at tech companies that are now better established than they were during the dot-com bubble a decade ago.
“I’m getting Google people and they’re making money,” Glynn said. “We’re getting the second wave of dot-com kids.”
Rents on the rise
Average San Francisco rental
Second quarter 2010: $2,214
Second quarter 2011: $2,422
Average rent cost per unit type
Loft: $2,100
Studio: $1,821
One bedroom: $2,229
Two bedroom, one bath: $2,394
Two bedroom, two bath: $3,272
Three bedroom, two bath: $2,975
Three bedroom, three bath: $3,609
Source: RealFacts
