Rent prices continue to rise in Bay Area with healthy job market
SAN FRANCISCO (KTVU) - According to real estate value tracker Zillow, San Francisco's median monthly rent bill is an astonishing $4,225 and prices keep rising rapidly. Right now it's the mother lode for landlords and a rough ride for renters.
Meanwhile, there are dangers this could present if the big boom turns into a busted bubble.
If San Francisco is the epicenter of high rents, the shock waves are spreading out rapidly.
Property value tracker Zillow.com says that in the central metropolitan Bay Area, rents are up about 15 percent over last year. "We do see this trend toward renting and there are lots of studies that say that's a temporary trend, not some permanent shift," says Professor Christopher Palmer, Real Estate Economist at the UC Berkeley Haas School of Business.
For now, year over year, Zillow says already high rent in San Jose, is up just shy of 13 percent.
Mega priced San Francisco is up 15.5 percent, while neighboring Daly City is up more than 20 percent.
Across the Bay, Oakland is up 21.6 percent.
Neighboring Emeryville is up almost 26 percent and its neighbor Berkeley is up a whopping 31 percent.
Sam Sorokin's Premium Properties manages 600 rental units in Berkeley and Oakland "I'd say in the last year, they have increased quite a bit because there's lack of vacancy," says Sorokin.
His Craigslist offerings reveal a tsunami of renters more than willing to pay. "Usually in a week we have a qualified resident," says Sorokin.
Those qualified residents are increasingly well paid dot-com techies who want to live close to where they work.
"A big increase in employment in the Bay Area and again particularly in Silicon Valley and the San Francisco area," says Professor Jim Wilcox, a Macro Economist at the UC Berkeley Haas School of Business.
It's all about techies migrating here from all over the nation and world.
"We're at the center here of the social media and Internet commerce world," says Michael Bernick, a Labor Lawyer and the Former Director of California's Employment Development Department.
Last month, he says California created 30,000 new jobs. "We're only 13 percent of the state's population and we accounted for more than half the jobs created," says Bernick.
"That's what people are paying for is access to this market," says Palmer.
If the job boom continues, prices go up. If they level off - prices level off. Only a loss of jobs, a big loss of jobs, will bring them back down.