San Jose has among the most expensive real estate prices in America. This has spilled over into rent prices. Not only does the city have among the most expensive rents, but that figure is expected to spike 7.8% this year, the largest jump among all major metropolitan areas.
According to real estate research firm Zillow, rent prices across all metro areas will be close to flat this year:
Rent appreciation will level off over the next 12 months, slowing to an annual rate of 1.1 percent by December 2016, according to the new Zillow Rent Forecast. The national Zillow Rent Index at the end of 2016 is projected to be $1,396 — compared to $1,381 in December 2015.
Rental rates are not only going to rise in San Jose. They are among the highest in the country already at $3,699. By contrast, the city with the lowest average rent among all major metros is Pittsburgh at $1,079, and that number is forecast to drop 1% this year:
“Hot markets are still going to be hot in 2016, but rents won’t rise as quickly as they have been,” said Zillow Chief Economist Dr. Svenja Gudell. “The slowdown in rental appreciation will provide some relief for renters who’ve been seeing their rents rise dramatically every single year for the past few years. However, the situation remains tough on the ground: rents are still rising and renters are struggling to keep up.”
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Rental rates tend to be very high in California and lowest in the old industrial cities. The average rent this year in San Francisco is forecast to be $3,536, up 5.9%. The average rate in San Diego will be $2,348, up 1.4%, according to Zillow. In Los Angeles, the average rental is expected to be $2,561, up 2.8%.
Detroit is a good example of how low rental rates are in cities that used to be the largest manufacturing hubs. Rates there are expected to be $1,128, down 0.4%. That is only 30% of the average rate in San Jose. Another old industrial city, St. Louis, will have an average rate of $1,115, down 0.7%.
Location, location, location.
Methodology: The Zillow Rent Index (ZRI) is the median Rent Zestimate (estimated monthly rental price) for a given geographic area on a given day, and includes the value of all single-family residences, condominiums, cooperatives and apartments in Zillow’s database, regardless of whether they are currently listed for rent. It is expressed in dollars.
|
Metropolitan Area |
Dec. 2015 ZHVI |
Dec. 2015 ZRI |
ZRI Forecast for Dec. 2016 |
Forecasted |
|
United States |
$ 183,500 |
$ 1,381 |
$ 1,396 |
1.1% |
|
New York/Northern New Jersey |
$ 381,200 |
$ 2,384 |
$ 2,400 |
0.7% |
|
Los Angeles, CA |
$ 554,700 |
$ 2,491 |
$ 2,561 |
2.8% |
|
Chicago, IL |
$ 193,000 |
$ 1,633 |
$ 1,611 |
-1.4% |
|
Dallas-Fort Worth, TX |
$ 177,200 |
$ 1,500 |
$ 1,532 |
2.1% |
|
Philadelphia, PA |
$ 203,100 |
$ 1,558 |
$ 1,550 |
-0.5% |
|
Houston, TX |
$ 170,100 |
$ 1,579 |
$ 1,619 |
2.5% |
|
Washington, DC |
$ 357,800 |
$ 2,107 |
$ 2,118 |
0.5% |
|
Miami-Fort Lauderdale, FL |
$ 225,700 |
$ 1,822 |
$ 1,886 |
3.5% |
|
Atlanta, GA |
$ 160,000 |
$ 1,274 |
$ 1,280 |
0.5% |
|
Boston, MA |
$ 382,900 |
$ 2,247 |
$ 2,309 |
2.7% |
|
San Francisco, CA |
$ 785,800 |
$ 3,338 |
$ 3,536 |
5.9% |
|
Detroit, MI |
$ 121,800 |
$ 1,132 |
$ 1,128 |
-0.4% |
|
Riverside, CA |
$ 298,200 |
$ 1,691 |
$ 1,723 |
1.9% |
|
Phoenix, AZ |
$ 216,000 |
$ 1,249 |
$ 1,266 |
1.4% |
|
Seattle, WA |
$ 368,700 |
$ 1,931 |
$ 2,018 |
4.5% |
|
Minneapolis-St. Paul, MN |
$ 214,300 |
$ 1,500 |
$ 1,511 |
0.8% |
|
San Diego, CA |
$ 499,900 |
$ 2,316 |
$ 2,348 |
1.4% |
|
St. Louis, MO |
$ 141,000 |
$ 1,123 |
$ 1,115 |
-0.7% |
|
Tampa, FL |
$ 160,100 |
$ 1,296 |
$ 1,302 |
0.5% |
|
Baltimore, MD |
$ 242,300 |
$ 1,714 |
$ 1,702 |
-0.7% |
|
Denver, CO |
$ 320,800 |
$ 1,952 |
$ 2,031 |
4.0% |
|
Pittsburgh, PA |
$ 126,700 |
$ 1,090 |
$ 1,079 |
-1.0% |
|
Portland, OR |
$ 310,200 |
$ 1,689 |
$ 1,753 |
3.8% |
|
Charlotte, NC |
$ 157,800 |
$ 1,221 |
$ 1,250 |
2.4% |
|
Sacramento, CA |
$ 331,500 |
$ 1,599 |
$ 1,654 |
3.4% |
|
San Antonio, TX |
$ 148,000 |
$ 1,301 |
$ 1,306 |
0.4% |
|
Orlando, FL |
$ 180,600 |
$ 1,343 |
$ 1,373 |
2.2% |
|
Cincinnati, OH |
$ 141,800 |
$ 1,225 |
$ 1,243 |
1.5% |
|
Cleveland, OH |
$ 124,300 |
$ 1,124 |
$ 1,117 |
-0.6% |
|
Kansas City, MO |
$ 146,600 |
$ 1,199 |
$ 1,228 |
2.4% |
|
Las Vegas, NV |
$ 199,800 |
$ 1,212 |
$ 1,191 |
-1.8% |
|
Columbus, OH |
$ 150,900 |
$ 1,271 |
$ 1,289 |
1.4% |
|
Indianapolis, IN |
$ 130,100 |
$ 1,181 |
$ 1,138 |
-3.6% |
|
San Jose, CA |
$ 933,000 |
$ 3,431 |
$ 3,699 |
7.8% |
|
Austin, TX |
$ 242,900 |
$ 1,683 |
$ 1,741 |
3.4% |
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