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San Francisco rents may never go down, says new report

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You might want to sit down for this one

Most of us have been on edge about rents in the city all year. And while they have sort of gone down over recent months, they have also gone up, refusing to commit to any particular pattern. It’s like a bad relationship.

Prices are at least not leaping double digits like in recent years. Observers usually finger increasing supply as the reason. But that doesn’t do much practical good for renters short on oxygen unless new supply starts pushing rents back down.

So will any of that relief come? Well, nobody can see the future. Which is lucky, because if Nat Kunes, vice president of the property management software company AppFolio, could predict market trends to come, the news would be discouraging.

"I’m in the camp that says [a decline] is probably not going to happen," Kunes told Curbed SF. "Even with supply leveling out, you’re more likely going to see just years of small growth: four percent, two percent. But probably never a serious decline. It's just faster to add jobs than housing."

That’s in line with AppFolio’s August apartment forecast, which draws on AppFolio clients (property management companies, by and large) and market data to suss out the immediate future. According to the report, San Francisco is on track for 3.7 percent rent growth by the end of 2016.

More or less, that does seem to correspond to what’s been happening. We report whenever rents go down month over month or year over year. But as a whole, the line has been slowly but stubbornly creeping upward all year, albeit no longer fast enough to hyperventilate over.

AppFolio gives the credit and/or blame (depending on your point of view) for rising prices to the job market, a conclusion echoed by the apartment site Abodo in their mid-month rent index. The median San Francisco listing on Abodo hopped up six percent last month to $3,952 for a single bedroom home, a spokesperson told Curbed SF.

Abodo’s numbers seem to be fairly volatile, however; last month, for example, the site recorded a five percent drop in the city median. Earlier in the month, competing sites registered declines, not only in San Francisco but across the Bay Area.

ApartmentList even continues to insist that we’re once again cheaper than New York City, although that has more to do with New York prices jumping up than ours going down.

It’s possible that Abodo is just an outlier with a weird sample of listings from its own site. Or, it could be that its mid-month rent index is capturing an actual late summer price spike that will show up everywhere else when September data comes in. Either way, probably best not to splurge on anything. Not just yet.