Apartment search company Zumper released its August rent report, which shows that for vacant apartments on its web site, which has half a million listings, the median in San Francisco is higher at $3,100 for a one bedroom versus $2,995 in New York. The median price for a one bedroom in San Rafael ties with New York.
“For the first time we’re seeing San Francisco rents trump New York,” said Anthemos Georgiades, San Francisco-based Zumper’s CEO and co-founder. “The very low vacancy rate in San Francisco, alongside the tech boom and the slow pace of new construction coming to market, have all led to this spike. New York’s most exclusive neighborhoods, however, still rank as the most expensive in the U.S. That hasn’t yet changed but we’re watching it.”
New York’s priciest neighborhoods are led by Tribeca in lower Manhattan and Dumbo on Brooklyn’s waterfront. San Francisco’s priciest area is Russian Hill with a median of $4,000 for a one bedroom, followed by South Beach with $3,800, according to Zumper. ( Click here to read Zumper’s full report.)
Georgiades said he’s not surprised by this data.
“We’ve been expecting this for a while. When you combine the low vacancy rates in San Francisco with the tech boom and the modest pace of new constructions coming to market, it’s not a surprise.”
Zumper is among a group of new real estate startups waging war on Craigslist amid the apartment search frenzy.
Zumper brought its apartment listings service to market in 2012. It offeres Zumper Pro, a tool that lets landlords create listings and upload photos from their smart phones as a way to cut down on time.
The company also targets the tenant side with its website and mobile app.
Zumper’s main focus has been on its mobile app and providing renters and landlords features on their smart phones like promoting an open house in real time and seeing listings as soon as they appear.
The company was co-founded by Georgiades, a Harvard M.B.A. who has raised funding from Kleiner Perkins, Andreessen Horowitz, Greylock, CrunchFund, NEA and others.
Georgiades said the spike in San Francisco rents is structural.
“It’s an enormous testament to the demand — the Bay Area is buzzing. But it’s also a humbling reminder of the structural supply-side factors that continue to drive upward pressure on prices: limited new construction on the way; rent control regulation that has led to very low vacancy rates; short term leasing which has spiked rents and taken long-term leases off the market.”