In the South Bay--where the most new apartment construction has occurred (439 units in the third quarter), and where the median home price rose 3.4% to $800,000--average vacancy increased 10 basis points from last fall to 3.7% while the average asking rate grew 7.5% to $1,509. All but the West Valley submarket had a vacancy rate very near the average; West Valley's vacancy was the submarket's lowest at 2.4%.

On the investment front, of the 22 San Francisco properties that have sold through the first nine months of the year 20 were built before 1974. The average price for the older stock was $191,674 per unit or $271.21 per rentable sf. During the first nine months of 2006, 28 older properties changed hands in San Francisco at an average price of $182,969 per unit or $252.15 per sf.

In the East Bay, 65 properties changed hands through the third quarter. Of the total, 44 were built before 1974. The average price for that older stock was $123,629 per sf or $177.54 per unit. In the same year-earlier period for the same aged stock, the average price was $116,175 per unit or $151.02 per sf. For the eight East Bay properties built after 2000 that changed hands this year, the average price was $314,753 per unit or $266.35 per sf, up from the 206 average of $227,752 per unit or $242.48 per sf.

East Bay properties built in the latter half of the 1980s saw their average sales price decline in 2007, according to the H&P report. The average sales price through the third quarter of 2007 was $151,750 per unit or $176.67 per sf, down from $176,135 per unit and $202.43 per sf through the first nine months of 2006.

In the South Bay, 35 of the 40 properties to change hands so far this year were built before 1974. The average sale price for that older stock was $163,519 per unit or $212.73 per sf. Through the first nine months of 2006, 44 older properties changed hands at an average price of $167,522 or $193.31 per sf.

Marcus & Millichap, an investment brokerage firm, states in its third quarter report on San Francisco that sales velocity in San Francisco has picked up 8% over the past 12 months. During that time, the median price has gained 6.3% to $236,000 per unit, as strong revenue growth and healthy renter demand have effectively outpaced the impact of higher metro-wide cap rates. Cap rates for the metro's apartment properties have edged 30 basis points higher over the last year into the low- to mid-4% range, according to the report, which states that cap rates could inch higher in the near future as financing becomes more difficult to obtain.