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According to SmartAsset, the Bay Area has three of the top five cities wi the highest price-to-rent ratios in the country. Any ratio above 21 means that renting is generally advantageous. San José has a ratio of 42.2; San Francisco is 37.3 and Oakland stands at 32.
Of course, this is only one indicator and individual circumstances vary such as income, available downpayment, and how long one plans on staying in the home.
Data from the National Association of Collects and Employers shows that the average starting salary for college grads in 2020 was approximately $55,000, an increase of 14 percent from 2010. Not bad.
Meanwhile, Apartment List reports that apartment rents have risen 16 percent in the last year alone and 28 percent since 2017. Not good.
Many college grads are taking on roommates to help defray the cost.
With competition for affordable units very high, many property owners are requiring cash savings and stable work histories which recent graduates often can’t supply.
While the early days of the pandemic saw many city dwellers leave for the suburbs and a subsequent drop in rental rates, realtor.com reports that many who remained – or returned – are now facing increases by as much as 40 percent.
Currently, some states have laws limiting how much rates can be increased in a given year, but many do not.
Some tenants are negotiating two-year leases to get a slight break, while others are offering a few months of rent upfront.
With the eviction ban scheduled to end at the end of September, many renters and landlords are still waiting for their share of $500 million in federal aid that has already been allocated to the Bay Area.
To date, California housing officials have received requests for $1.4 billion in relief and paid out $426 million — approximately 30% — since the program began in March.
Large cities and counties established their own programs, and have primarily focused on the poorest renters most likely to become homeless.
Analysts say that application websites are often glitchy and many of the requirements for state and local aid are confusing.
According to a new report by Zillow, in the 50 largest U.S. metro areas, 33 have rents that are higher than monthly mortgage payments. As nearly 52 percent of all employees are at least partially working remotely, many are finding that they can rent out their current home and live whereever they wish.
Currently, single-family homes make up approximately one-third of the nation’s rentals. 70 percent of rental properties are owned by individuals.
Of course, rentals slowed dramatically after the onset of the pandemic but rents are up in all major 50 metros.
Rents are rising across the country and according to a new article in the San Francisco Chronicle, the Bay Area features 3 of the top 10 most expensive cities in which to rent in the U.S. (actually the 3 are in the top 7).
July 2021 – 1 Bedroom Median Rents
The U.S. Treasury disbursed $25 billion to states for rental assistance in February. Congress then allocated another $21 billion in March. By the first of June only $1.5 billion of that money had actually reached renters – a total of 176,000 households.
With the federal moratorium on evictions set to expire at the end of July, a huge number of renters could be facing eviction. It is estimated that 11.5 million or 16% of all renters have fallen behind on their payments.
As the pandemic eases, rents in the Bay Area are slowly increasing, although they remain below pre-COVID levels for the most part. Over the last three months, San Jose has seen an increase of 2.9 percent, while Oakland is up 3.6 percent and San Francisco 5.3 percent.
Some analysts believe that rents may never return to pre-2020 levels because many who left the Bay Area during the past year will not return.
Even with the downturn in rental rates, Bay Area cities remain among the six most expensive areas in which to live in the nation.
As we ease our way out of the pandemic, many are wondering if this is a good time to invest in the rental market, particularly single-family rentals. The fact that housing inventory will remain in short supply means that home values will continue to appreciate – good news for investors. The fact that interest rates are expected to rise means that some would-be homebuyers will be priced out of the market.
As home values rise, rental rates are expected to rise as well. Of course, eviction moratoriums provide a level of uncertainty in all this. Experts predict that the number of renters will keep vacancy rates low in most areas. In addition more homes are being built specifically for rental use only.
