The San Francisco Association of Realtors, of which I am a member, just came out with its Market_Focus_Report for May_2012 (click to open). If you’re a seller or landlord, the news is great: home prices and rents are up, up, up. Not so good if you’re on the other side of the deal.
It’s right to read these Reports skeptically. After all, the SFAR represents virtually all San Francisco’s residential agents so one can sometimes feel that their attitude is that it’s always a good time to buy. In this case, though, their conclusion seems defensible:
Prospective home buyers still on the fence about purchasing should consider the current state of the rental market in the city, which continues to tighten with rising rents. Based on a recent article published in the San Francisco Chronicle, rental rates in the city rose by 15.8 percent compared to the same time last year, with an average rentof $2,663 for all units. Studio apartments rose by 16.5 percent to an average of $2,075, while one-bedroom, one bathroom apartments also increased by 19.9 percent to an average of $2,611.
Combine those enormous rent increases with record low interest rates and the Association may just have a point. (For a great tool to compare rental cost to home ownership take a look at this New York Times site.
But be forewarned: the bidding wars of 2007/2008 are back in full force, due in large part to the strength and diversity of the Bay Area economy. And unless the feeble job growth we’re seeing nationally comes home to roost, I don’t see an end to this hot sellers’ market any time soon.