Rents are Up, Up, Up in Oakland
With San Francisco and San Jose constantly trading off the #1 position for apartment revenue growth among the country’s major metros during the past couple of years or so, it’s been easy to overlook that neighboring Oakland has sustained a top 10 performance in its own right.
As of 1st quarter the East Bay’s apartment stock was 97.1 percent full, with that figure up 0.9 percentage points on an annual basis. No more than a handful of vacancies exist in any product niche or in any individual neighborhood.
Effective rents for new leases in metro Oakland climbed 1 percent during the initial three months of 2012 and 7.8 percent during the year-ending 1st quarter. While that annual growth pales compared to 12.7 percent in San Jose and 11.4 percent in San Francisco, only Boston – with rents up 8.1 percent – prevented the Bay Area metros from making a clean sweep of the top three positions in the rent growth rankings.
Stand-out neighborhood-level performers for rent growth during the year-ending 1st quarter across the East Bay included Walnut Creek/Lafayette, where pricing soared about 16 percent, and the Oakland/Berkeley submarket, where the jump in rents topped 12 percent.
It might prove tough for metro Oakland to repeat the huge rent growth recorded during the height of the leasing season in 2011: hikes just shy of 6 percent occurred in the six months of 2nd and 3rd quarters. Thus, a little bit of a slowdown in the annual rent growth pace may lie immediately ahead. Still, the East Bay’s performance appears likely to surpass the national norm by a big, big margin for quite a while to come.
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