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Bay Area Apartment Market is Stabilizing

SAN FRANCISCO-Marcus & Millichap reports that the Bay Area apartment market is stabilizing, saying that sliding rents should end this year. Jeffrey Mishkin of M&M says that the downtrend has come to an end.

By Michelle Savage | Updated on February 01, 2002

SAN FRANCISCO-Marcus & Millichap’s latest Apartment Research Report for the Bay Area market indicates that the market is stabilizing and the slide in rents should end this year.

“Through 2000 and early 2001, rents in the Bay Area were in a bubble with rents rising at unprecedented rates,” says Jeffrey Mishkin, regional manager in the firm’s San Francisco office. “Similar to the stock market, when the bubble burst, a downward correction ensued. Fortunately, rents are no longer perceived as over-inflated and the downtrend has come to an end.”

The report predicts that 2,290 new units will enter the San Francisco market, while another 2,340 units will come online in the Oakland region over the next year. Combined, the new supply will represent a 2% increase in the local apartment stock. The limited amount of construction activity in San Francisco and Oakland, relative to existing product, will keep the markets from becoming excessively imbalanced.

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