Last week, On the Block’s  Jenny Pisillo asked if it isn’t cheaper these days to buy in the Bay Area than rent. Today, we revisit the topic. More proof that the rental market in SF is crazy? Trulia’s Rent Monitor report offers plenty.

First, a smattering of available rentals in popular SF neighborhoods.

Lower Pac Heights

How about this: a 1 bed, 1 bath apartment on Gough in the lower Pac Heights area for $3,100 a month? Wait: isn’t that the price for the actual Pac Heights, like where Danielle Steel lives? Yes, this unit allows pets and yes, boasts not 1 but 2 walk-in closets you could potentially house roommates in; but still: $3,100 a month for a one bedroom is steep.

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SoMa

The SoMa is all the rage now, thanks to tech boom 2.0, aided also by Twitter setting up camp in a less than savory South of Market area in exchange for a tax break. Suddenly the ‘loin is looking more tender and folks are shelling out what used to be Upper-Fillmore prices for anything near the “Multimedia Gulch.”

Example? Here’s a 2 bed, 2 bath 1,200 square foot loft on Sumner. Price: $3,800 a month.

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South Beach

Remember the days when South Beach was little more than industrial buildings and tumbleweeds? Now South Beach is hailed as “up and coming,” though by the looks of this listing, it has fully arrived. Here we have a 2 bed, 2 bath condo on Main Street for $6,800 a month.

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Russian Hill

The stately neighborhood only gets more so, it seems.  Rents here, always dear, have now reached rather astounding levels, such as evidenced by this 3 bed, 2 bath single-family home (address undisclosed but there’s a Van Ness address listed on one of the photos in the listing linked here) for $11,000 per month.

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If these rents seem (still, again, once more!) higher than ever, that’s because they are, according to Trulia’s study, The Trulia Price Monitor and the Trulia Rent Monitor adjust for the changing mix of listed homes to accurately describe and predict rents. Says Trulia: “Because asking prices lead sales prices by approximately two or more months, the Monitors reveal trends before other price indexes do.”

Highlights from the report

In August, asking prices rose 2.3% year over year, the largest annual jump reported yet by the Trulia Price Monitor and the largest year-over-year increases since before the recession. Excluding foreclosures, asking prices rose nationally 3.8% year over year. The month-over-month increase of 0.8% was the seventh consecutive monthly increase.

Among the largest 25 rental markets, rents rose the most in Houston andSeattle, where they climbed more than 10% year over year in August. Rents are no longer rising so quickly in Denver, San Francisco, Miami, Oakland and Boston, but that may not be much comfot: these hot rental markets are still seeing annual rent increases of 8% or more.

SF’s most popular ‘nabes

In a city with such an uber-popular rental market, which neighborhoods get the most attention? Trulia tracks the most searched for neighborhoods on its site, and here they are.

Can the madness continue?

What do you say, readers? The holidays and general real estate slow down are coming. Are lower rents– or at least an end to higher ones– coming too?

Anna Marie Erwert writes from both the renter and new buyer perspective, having (finally) achieved both statuses. She focuses on national real estate trends, specializing in the San Francisco Bay Area and Pacific Northwest. Follow Anna on Twitter: @AnnaMarieErwert

Article source: http://blog.sfgate.com/ontheblock/2012/09/27/sfs-most-popular-neighborhoods-fetch-dear-rent-indeed/

Meanwhile, a separate report showed the number of underwater homes in the nine Bay Area counties slowly subsiding as values rise.

“It is starting to come back, there is no question,” Ting said. “San Francisco remains probably the strongest real estate market in the state.”

Throughout the housing downturn, San Francisco was a Teflon-coated county compared with the rest of California, with more moderate declines in real estate values than elsewhere. It was the only county in California that never saw its overall tax roll shrink during the downturn. For the 2012-13 tax year, the assessed values in San Francisco grew 4.17 percent, or $6 billion.

Commercial properties led the growth surge, particularly in emerging areas for biotech and technology firms: Mission Bay, the South of Market portion of the Financial District, and the Inner Mission.

“Even during this very challenging recession, we’re seeing (strength in) those markets driven by industries like life science, biotech and health care as well as tech companies,” Ting said.

Under Proposition 13, properties are reassessed by more than the annual 2 percent limit when they change hands, undergo significant renovation or are newly built. All three factors were at play in the surge in values in areas such as SoMa and Mission Bay.

Residential recovery

On the residential side, the recovery is more checkered, with weak areas particularly in the southeast and western parts of town.

Proposition 8, passed in 1978, lets assessments temporarily drop to match lower property values. Around the city, 15,811 properties got such reductions this year, averaging $175,980 in reduced value per home.

Ironically, Mission Bay, South Beach and South of Market – home to lots of new condos – were among the residential areas with the most Prop. 8 reductions, despite their boom on the commercial side.

“That whole cluster was heavily impacted and had the biggest overall declines in roll value,” Ting said. “They had a significant amount of new building, which created a bit of temporary oversupply.”

Lower-income areas, such as Bayview and Excelsior, continue to struggle.

“Those generally have been the softest real estate markets over the past couple of years,” Ting said. “They are entry points for the first-time home buyers. They were the first to show softness and the last to show strength.”

Meanwhile, perennially popular – and pricey – neighborhoods such as Pacific Heights, Noe Valley and Russian Hill saw assessed values rising.

“Areas that traditionally have been in high demand remain fairly strong,” Ting said.

Overall, Ting said, “I feel our recessionary recovery is U-shaped. We’ve definitely stabilized. It doesn’t feel like it’s jumping back in a sharp V shape the way it did in 2004 or 2005.”

Frothy market

Assessments look at property values as of Jan. 1, so this year’s exceptionally frothy real estate market is not yet factored in. But a report from real estate service Zillow showed that rising home values decreased the percentage of underwater properties between the first quarter and second quarter.

“It’s good news that negative equity is dropping, but we expect the overall recovery to be fairly slow,” said Stan Humphries, Zillow chief economist. “We are now mostly at bottom in most markets.”

Alameda and Contra Costa counties – two of the hardest-hit areas locally – saw significant changes in negative equity, which went from 33.8 percent of mortgaged homes in Alameda to 30.9, and from 42.8 percent in Contra Costa to 40.1.

“Besides a very healthy appreciation in home values, the high pace of foreclosure activity is also pushing negative equity down” in those counties, Humphries said.

That’s because once underwater homes are repossessed by banks and resold at lower prices, the new owners start out with equity through their down payments.

San Francisco stands out for having a relatively small pool of underwater homes.

“The big driver is that home values there are down just over 12 percent from their peak,” Humphries said. “That’s a very modest decline, which leads to a very low rate of negative equity.”

By comparison, Alameda values are down 37 percent from peak, Contra Costa almost 51 percent and Solano County almost 60 percent, he said.

Negative equity slowly subsides

The percentage of underwater homes, with mortgages larger than the value, decreased in every Bay Area county between the first and second quarters of this year.

Source: Zillow.com

Where home prices are rising

These neighborhoods saw the biggest increase in total assessments, which look at the values of all properties as of Jan. 1.

Source: San Francisco Assessor’s Office

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/business/article/SF-property-values-rebounding-3814168.php