Is the city’s glass one-fifth full or four-fifths empty?
According to real estate site Trulia, just more than 21 percent of rentals across the city cut prices in the last 12 months.
In this case, that’s a measure of how many ads taken out on Trulia.com, eventually reduce their asking price before the ad disappears from the site—either by finding a tenant or simply withdrawing without one; the site doesn’t collect data on which eventuality occurs.
That 21.3 percent rate is Trulia’s highest in the nation, barely ahead of San Jose’s 21.2. Last year, the same statistic on the site yielded a figure of only 13.6 percent.
Perhaps surprisingly, the Trulia report doesn’t suggest that rents are going down overall. The site estimates a marginal (0.3 percent) increase in the city’s rent median year over year.
However, plenty of competing real estate and apartment listing sites do continue to argue that rents are on the decline, at least on their own platforms.
ApartmentList, for example, says that after October, San Francisco (say it with us) still has the highest rents in the nation, but that prices are down 3.6 percent compared to 12 months ago.
That comes out to $3,440/month for one bedroom and a whopping $4,700/month for two.
Zumper prices a single bed in the city at $3,380/month, a decline of nearly eight percent from last year. Two bedrooms on Zumper average $4,670/month, down 6.6 percent.
It’s admittedly a weird kind of decline. But the trend is consistent, and tertiary signs of it, like the Trulia price cuts and the free rent deals that proliferated during the summer, seem to corroborate it.
So what’s going on? Patrick Carlisle, an analyst at Paragon Real Estate, speculates that what we’ve seen in 2016 is just the upper limits of demand, as prices eventually reach a point where nobody, however wealthy and motivated, is willing to pay them.
SocketSite, on the other hand, suggests a more traditional supply and demand explanation: With more apartments being built, greater competition for tenants tops off how high rents will go.
The latter would probably be the best possible news for beleaguered renters, as there are yet more new apartments on the way.