For those keeping score at home, that’s an increase of 70 percent from the city’s Zillow low of $1,757 in January of 2013.
If you find this alarming, that just means that you’re paying attention. But before you run for the wilderness because the end is nigh, know that things may not be quite as bad as all that.
For one thing, Zillow isn’t taking the housing temperature of the entire city, it’s just measuring what’s happening with listings on Zillow. And, as SocketSite points out, Zillow’s Rent Index doesn’t include apartments, which is a pretty big variable to exclude.
(Apartment site Zumper most recently estimated that an apartment in Oakland averages $2,210/month for one bedroom or $2,600/month for two. That’s a year-over-year increase of 6.3 and 6.1 percent, respectively, at least on Zumper.)
Furthermore, Zillow’s Rent Index is actually more of a prediction than a hard figure. It uses rent numbers, but also some statistical models to try to fill in the gaps on data it doesn’t have. This being an election year, you might compare it to polling analysis.
This isn’t to say that Zillow’s indices aren’t reliable. (We’d have to examine their methodology much more closely to know that.)
Just remember that, unlike home sales, rents aren’t reported in a uniform way to any one particular source, which means you’ll rarely get the same opinion about them out of any two different places.
So, the average market-rate rent in Oakland probably isn’t really $3,000/month. And that’s good news.
But that Zillow’s index for Oakland has never climbed this high before is definitely something to pause over. Regardless of precisely what hard number the index translates to on the first of the month, the fact that it’s spiked this much still spells trouble.
Final analysis: Don’t panic. But maybe do worry.