Rents rise as home buyers wait. Fewer homes are selling because of volatile prices and sub-prime uncertainties, pushing up rents in San Francisco.
Most people would like to move out of their apartment, buy a bigger home in the suburbs and start a family. But they won’t do it anytime soon in this climate.
At this point they are waiting to see how the housing slowdown, the local market bubble and problems in the sub-prime lending industry pan out before committing to a mortgage. In cities like ours, would-be buyers fear the market is inflated as prices rise even while properties take longer to sell.
The national picture looks like this: Fewer homes are selling and rents are on the rise.
It’s a big change from just a few years ago, when home prices were appreciating like mad. As a result, there are fewer vacancies and increased demand for apartments, allowing landlords to raise their rents.
According to New York real estate firm Reis, the average U.S. asking rent rose 1.1% in the second quarter of 2007. That is 7.74% higher than it was two years ago. This has been magnified here in SF as rents have risen approximately 15% in the last year alone.