Rental Inventory Holds, Rents Slip

Does it feel easier to get an apartment in San Francisco? It should, because it is.

Rental inventory is holding steady at around 50% higher than this time last year, a level where it's been hovering for most of 2016. The trend holds true in most neighborhoods -- not just SOMA, which gets most of the popular press for new units coming on line.

The ultimate question is whether the bloated inventory will help push down rents. Data in this regard isn't jiving with what we're seeing in the market. SF rents, when measured by median rent -- the popular metric reported in the press -- continue to make new highs as a greater portion of the available stock is made up of high-rise, luxury units. Meanwhile, personal experience and anecdotes in the market tell a different story.

We are having a hard time renting units in our portfolio, even having to drop asking rents in certain circumstances. We're hearing the same thing from our friendly competition -- one of the city's largest landlords even dropped rents by 10% across the board for newly available apartments.

They say in real estate that prices follow volume. We're watching closely to see if this axiom holds true, and whether it starts to play out in the data.