Apartment rents boom in California Bay Area

The Bay Area experienced a significant jump in apartment rents.

A report from RealFacts showed that the Bay Area experienced a stong improvement in apartment rents, which is due to an increase in local employment and hesitation from consumers about the lack of growth in the housing market.

Rentals increased to their highest levels throughout much of the region during the past 12 months, according to the Silicon Valley Mercury News, citing the report. San Jose rents improved 10.1 percent over the year, which brought the average to more than $1,800. The last time it was that high was in 2001, when it reached more than $1,670.

Oakland experienced a jump of more than 14 percent, which put average rents close to $1,830, the report found. Rental rates in San Francisco rose by nearly 13 percent and Walnut Creek also neared a 12 percent gain.

"What it means is you've got millions of people who would normally buy forced into the rental market and they bid the rents up," Richard Carlson, chairman of Spectrum Economics, told the news source. "People are forced into smaller and smaller units. They are paying a higher and higher percentage of their income for rent. And that means they can't spend money on other things, so everybody is hurt. This is happening everywhere [in the nation]."

Rental prices throughout the area have increased continuously since the midpoint in 2010, the report noted. When looking at specifics, San Francisco, Alameda, Santa Clara, San Mateo and Contra Costa counties all had sizable gains.

Furthermore, San Benito and Santa Clara witnessed rent jumps of more than 5.6 percent compared to the first quarter's figure, which totaled an average of $1,961 for each area. The report also said that this was the largest increase of any of the metropolitan statistical areas examined by RealFacts. The area consisting of the counties of Marin, San Mateo, San Francisco, Alameda, Contra Costa and San Francisco saw rents rise more than 3 percent to approximately $1,800.

Continued gains in the Bay Area's rental market may mean good news for property management companies with interests in the area. Demand is heightened throughout these areas, but the news source added that demand may begin to level-off as the year winds down.

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