Vallejo may be the last chance for relatively affordable housing in the Bay Area, and this could easily impact the local real estate market, experts say.
Besides home prices here being the lowest in the Bay Area, rents in Vallejo are also the regions’s lowest. They are also the area’s third fastest growing, a new real estate industry report shows.
“We at Zumper have just published our latest monthly Metro Report for the SF Bay Area,” Zumper’s Crystal Chen said. “The report covers 30 cities in the metro area to highlight the most/least expensive cities and cities with the fastest growing rents.”
After analyzing more than 15,000 active listings last month, Zumper officials found Vallejo the least expensive city in which to rent, with a median price for a one-bedroom unit at $1,300, she said.
“When sorted by two-bedroom prices, Vallejo is still the least expensive city to rent in the SF Bay Area metro,” Chen said. “And the data in this post is from Vallejo city, not the Vallejo-Fairfield metro.”
Chen attributes this to a number of factors, but the news may already be outdated, she said.
“With higher crime rates and less modern amenities than other Bay Area cities, Vallejo in the past few years has not had a huge migration of new residents into the city,” she said. “More recently, however, that seems to be changing.”
Local Realtor Curtis Lafferty, who’s also in the home rental business, said he’s seeing this reflected on the ground.
“Rents are rising so fast here, I’m having a hard time keeping up with it,” he said. “Inventory is very low, and that drives up desire and price.”
Lafferty said he has noticed a migration into town from more expensive surrounding cities.
“Most of our people that are paying high rents are coming from outside the area,” he said. “Most of the people who live and work in Vallejo can’t afford to rent here; they’re being priced out of the market. Landlords are increasing their rents and there are people lined up to pay it. Those priced out are moving to less expensive areas, outside the Bay Area.”
Solano Association of Realtors President Linda Daraskavich reports seeing the same phenomenon.
“More people are moving into Vallejo from places like San Mateo and Alameda, and forcing residents farther east,” she said.
Although Vallejo rent prices are down slightly on a month-over-month basis, the yearly growth numbers are another story, with one-bedroom costs up more than 10 percent and two-bedroom prices up more than 13 percent, the report shows.
“Similar to what happened in Oakland, there has been increased interest in living in Vallejo since so many people are being priced out of the other, more expensive Bay Area cities,” Chen said.
While Vallejo’s rents may be the cheapest in the Bay Area, they’re still high compared to the rest of the country, the report shows.
Vallejo’s median $1,300 one-bedroom rent, compares to a $1,164 national median, according to the report. The national median for two-bedroom units is $1,377, where in Vallejo they’re $1,460.
“So, while rental rates in the other Bay Area cities will most likely continue to stay expensive, more and more people will be looking at Vallejo for rentals, which will probably continue to drive up prices big picture wise, with the increased demand,” Chen said.
Zumper found the Bay Area’s most expensive rents are in San Francisco, where a one-bedroom will set you back about $3,320 per month.
Vallejo’s one-bedroom median is $340 below the state median, and Napa’s $1,460 median rent makes it the second cheapest city to rent in the Bay Area, the report found.
Rents are rising fastest in Concord, with a yearly growth rate of slightly more than 15.2 percent since last year, followed by South San Francisco’s 15.1 percent and with Vallejo’s 15 percent right behind, the report shows.
A full discussion can be found on https://www.zumper.com/blog/2017/04/sf-bay-area-metro-report-april-2017/.
Contact Rachel Raskin-Zrihen at (707) 553-6824.