1. New York
2. San Francisco
3. Boston
4. San Jose
5. Los Angeles
In the numbers for Bay Area rent market:
San Francisco, Calif. $1,904
Very few residents here can afford the city's $800,000 median home-sale price. The result is an extremely tight rental market, which is expected to see the largest year-over-year jump, with rents expected to grow 8.6%. It's very difficult to add new inventory due to limited space, cost of business and developers' reluctance to dive into the fervently rent-controlled market.
San Jose, Calif. $1,612
The city to San Francisco's south suffers from many of the same ailments; there are, however, fewer barriers to expansion. San Jose rents are expected to climb 5.5% this year thanks to a low vacancy rate second only to New York City. Investor-cap rates are high, which, not surprisingly, means that construction in the rental market will surge 29%, relaxing some price pressure.
That's good news for Bay Area landlords, but bad for renters.
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