It is shaping up to be a long, hot summer for San Mateo renters as monthly fees due to landlords ticked up by nearly 4 percent in last year, continuing a steady incline for the past six months, according to a recent report.
The report from ApartmentList.com showed the median rent for a one-bedroom unit is $3,450 and a two-bedroom unit is $4,330, while the hikes follow a trend consistent throughout the region.
Of the 10 largest Bay Area cities, residential rents rose over the past year in each except San Francisco, and San Mateo is the most expensive big city with proximity to San Francisco, according to the report.
Median monthly rates in San Mateo are the only north of $3,000 for one-bedroom units among Bay Area locales such as San Francisco, Oakland, Pleasanton, San Ramon and Redwood City. The same can be said for two-bedroom listings, where San Mateo is the only above $4,000 per month, and San Francisco and surrounding areas float closer to the $3,200 mark.
Chris Salviati, a data analyst with ApartmentList, said while tenants may find the hot rental market exhausting, there is little indication that a cooling trend could be coming.
“The area is one of the most expensive and we continue to see rents increase substantially and that points to the fact that a lot of the affordability issues in this area aren’t showing any sign of easing,” he said.
Such a perspective is likely not a shock to those thirsting for the blazing market to extinguish a bit, as San Mateo and the broader Peninsula established a reputation as one of the nation’s most unforgiving regions on a renter’s wallet.
Report findings continue to bear out that trend, as ApartmentList finds San Mateo’s annual median rent increases outpace the national median by 1.3 percent and the city’s two-bedroom unit rates are significantly greater that metropolises such as Seattle, Portland, Chicago, Dallas or Phoenix.
Variation in the sorts of living spaces available explain some of the cost escalation locally, said Salviati, as renters may be willing to pay more for a two-bedroom home in San Mateo than a two-bedroom apartment in a bigger city.
Median rates for larger cities also account for the wide range of prices found across all neighborhoods, said Salviati, where San Mateo offers fewer fluctuations and a more consolidated cost.
“People might be looking at what they can get in San Francisco, and that might not be as much as if they move to where the median might be a little higher, but they are looking for more space and amenities,” he said.
The expensive cost of living has chased many families from the region, pushing them to outlying Bay Area cities or elsewhere in California. But the most recent report shows they may not find the relief they are seeking.
Ripples of the affordability crisis can be felt with dissipating impact in cities with proximity to the Bay Area’s urban environment, as rents ticked up in Sacramento by 8.2 percent since last year, with increases of 6.4 percent in Fresno and 5.5 percent in Orange County’s Santa Ana over the same period.
As has been the case since the local economy began to recover in the wake of the Great Recession, much of the rent increases can be tied directly to the wealth of lucrative jobs available on the Peninsula.
“If there continues to be an influx of new jobs and wage increases, then more rent increases are to be expected,” Salviati said.
High prices, mortgage rate hikes and low available inventory in the home buying market could also contribute to rental rate increases, said Salviati, as tenants eyeing a purchase may be keeping their apartments to wait for a real estate price dip.
Such a phenomenon would contribute to rental costs by consuming some of the potentially available units and pushing prices higher.
A committed watcher of the rental industry, Salviati said after years of gains it is reasonable to expect to see some natural flattening, which the local market had experienced last year before ticking up again.
“I guess at some point, if rents continue to increase at this rate, at a certain point it reaches a point where it is no longer tolerable,” he said.
But so long as demand to live locally continually fans the flames of a scalding rental industry, Salviati said he believes the most effective fashion of dampening continual rent increases is one of the most difficult fixes to prescribe.
“I think at this point, really what the market really needs is a whole lot of new inventory,” he said.