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How much will you pay for your next apartment?

With Rentberry, that all depends — on how much you’re willing to bid. The new real estate website is shaking up the Bay Area’s housing market by encouraging potential renters to bid on homes the way they would on designer handbags or celebrity autographs on Ebay.

Some housing advocates worry that Rentberry — and similar Vancouver-based startup Biddwell, which is set to expand to California by the end of the year — could intensify the existing competition for Silicon Valley’s few available houses and apartments. Critics envision the websites spurring cut-throat bidding wars that will drive sky-high prices even higher, but the platform’s founders say their tenants are actually saving money.

“It’s not about increasing prices,” said Alex Lubinsky, co-founder and CEO of San Francisco-based Rentberry. “It’s all about knowing and controlling the situation.”

But Rentberry’s impact on the Bay Area market may be particularly significant, as buying a home becomes an increasingly unattainable goal for many and more people choose to rent. The proportion of local renters is up about 5 percent compared to 10 years ago, according to a report by the New York University’s Furman Center for Real Estate and Urban Policy.

On the Rentberry website, landlords post photos of their properties, along with the desired monthly rent, and potential tenants then compete openly with each other to float the best offer. The site tells prospective tenants how many other applicants are in the running for each home or apartment, lists the highest offer received so far, and suggests a higher bid. Tenants also bid on a security deposit.

The site launched last year in San Francisco, Los Angeles and New York, and expanded its reach nationwide in April. Tenants pay $9.99 each time they submit an application for housing, and landlords who have more than two properties on the site pay $24 per month. So far, landlords have listed nearly a quarter of a million properties on the platform.

For some housing advocates, who are watching with dismay as ever-rising rents squeeze tenants throughout the Bay Area, Rentberry raises alarm bells. The median rent for a two-bedroom apartment in San Jose was $2,566 in October — up almost 22 percent from January 2014, according to Apartment List. Rent in San Francisco rose by 21 percent during that time period, and in Oakland it climbed 16 percent.

“I think that it’s unfortunate,” Sophia DeWitt, program director for East Bay Housing Organizations, said of Rentberry’s business model, “because any site or option like this that is going to increase or strengthen the speculative market in housing is bad for rental prices. That will just increase the rental prices, and it’s bad for renters.”

But Lubinsky swears his platform isn’t raising rents — in fact, it’s doing the opposite, because landlords are not automatically handing the lease to the highest bidder. It’s difficult and costly to evict a bad tenant, so most landlords would rather find a tenant who will stay for years and pay the rent on time, instead of a tenant who signs a lease for more money but stops paying after a few months, Lubinsky said. To do that, Rentberry landlords evaluate a potential tenant’s credit score, renter profile and other qualifications. And tenants can see each other’s information (anonymized to protect privacy), and get a clearer picture of where they stand in the competition.

On average, tenants using Rentberry pay between 4 and 6 percent below the landlord’s asking price, Lubinsky said — even in the Bay Area. When the site first launched last year, he told The San Francisco Chronicle that landlords could expect to see rental income increase an average of 5 percent. But that original estimate was based on an early beta test of just 10 landlords, he said, and did not end up becoming a larger trend.

Greg Rempe says using Rentberry saved him money. The 23-year-old moved from New Mexico to San Jose in June for a job at a startup, and stumbled upon Rentberry while searching for apartments on Google.

He bid on three apartments, but was determined not to enter a bidding war. For each apartment, he chose a maximum price that he wasn’t willing to exceed. One of the landlords ended up accepting his offer of $2,000 a month for a one-bedroom — below the $2,100 asking price, and below some of the other bids. It was more than he was used to paying in New Mexico, but Rempe walked away feeling like he got a good deal.

“I’m assuming it’s because I have a good credit score, but I don’t really know,” Rempe said. “Maybe I got lucky.”

Rempe appreciated the transparency of the bidding process. It was nice to know immediately where he stood in relation to a landlord’s other offers, he said. And after he moved into his new apartment Rempe used Rentberry to set up automatic payments for his rent, meaning he didn’t have to go through the hassle of sending his landlord a check every month.

Rentberry isn’t the only real estate platform that lets tenants bid on their rent. Biddwell operates with a similar model, but with one key distinction — bidding is done confidentially, so prospective tenants can’t see competing offers and try to one-up each other.

“We consciously make an effort to protect against bidding wars,” said co-founder and CEO Jordan Lewis, who helped launch the company in late 2016. “We want to use it more as a tool to facilitate negotiation.”

But that wasn’t always the case. When Biddwell launched the first test version of its platform, it looked more like Rentberry — it used an open system where potential tenants could see and respond to each other’s bids. That bidding process quickly began driving up rents, so Lewis’ team changed their game plan, and hid the bids. Potential tenants now see how many people have made an offer on a property, and if those offers are coming in at, above or below the asking price, but they can’t see individual bids.

As a result, 64 percent of offers accepted on the platform are below the landlord’s asking price, Lewis said.

Matt Regan, senior vice president of public policy for the Bay Area Council, said he isn’t worried about companies like Rentberry and Biddwell wreaking havoc on the local housing market. That’s mostly because the situation is already so bad that these platforms likely can’t do much to make it worse. In fact, he said, the Bay Area’s dire housing shortage means prospective tenants already engage in apartment bidding wars every day.

“This is probably a storm in a teacup,” Regan said, “compared with the tempest that’s swirling around us.”

Article source: http://www.mercurynews.com/2017/11/25/bidding-for-bed-tenants-haggle-over-rent-prices-new-real-estate-websites/

SAN FRANCISCO (KPIX) — Century-old architecture and cottage homes meet enormous, modern construction on the hottest street in San Francisco for high-roller tech executives.

Laidley Street, which curves around the east flank of the Glen Park neighborhood, could soon be recognized as a new San Francisco “microhood” which some realtors have begun calling Laidley Heights.

Take Laidley street’s newest home — dubbed Laidley Manor — on the market for a record $10 million. It’s a 5,300 square foot, five-bedroom, 5 1/2 bath home which features a zen garden, three levels, massive closets and top-of-the-line finishes.

“We have buyers, typically younger, high-tech buyers who are massively wealthy, typically suddenly so, and they’re not really interested in the mansion in Pacific Heights,” Patrick Carlisle, with Paragon Real Estate, told KPIX. “They want a beautiful new home, they want a high-tech home, they want a neighborhood ambiance that is lower-key and more relaxed.”

Laidley Street stretches south from Noe Valley. It is separated from Bernal Heights on the east by San Jose Ave. Among Laidley’s attractions are dramatic, unobstructed views of the San Francisco skyline, the Bay Bridge and East Bay hills.

Real estate agents told KPIX that Apple executives have snapped up and remodeled three pricey, mega homes in the area.

This past spring, a 5-bedroom, 4,400 square foot home sold for more than $5 million — the highest ever for the neighborhood. On a recent drive, it’s not hard to spot big construction projects on the block.

After the 1906 earthquake, many people from downtown moved into the neighborhood because it was mainly untouched by the disaster. Newly-homeless families lived in so-called earthquake shacks.

Andrew Ugrinow has lived on Laidley for 14 years. He and his husband plan to take advantage of the red-hot real estate market and cash out.

“We’re thinking about retiring and it’d be kind of nice to sell it at a higher price,” Ugrinow said. “We’re thinking about either going back to Ohio or Palm Springs.”

Judy Tergis is a third-generation San Franciscan.

“It’s gotta be sad you know, we have four children who can’t afford to live here and we’re lucky because my mother-in-law bought this house in the fifties (at) $50,000 or so for two lots,” Tergis explained.

Today the median home price for Glen Park is close to 1.5 million.

Philip Pasmanick’s 2-bedroom house is within walking distance of the luxury homes.

“I have mixed feelings because these homes — many of them only the elite can possibly begin to afford, whereas I bought my home for $200,000 and now my daughter still lives in her childhood room in the basement,” Pasmanick said.

Real estate market analyst Patrick Carlisle says the new generation of Silicon Valley elites has particular taste.

“They love areas like Noe Valley, the Castro and Cole Valley, places where they wander out in their jeans and sneakers for a cup of coffee and sushi and that sort of thing. And it’s also close to highways south on the peninsula,” Carlisle said.

Article source: http://sanfrancisco.cbslocal.com/2017/11/23/laidley-street-glen-park-real-estate/

Pending home sales declined across the state in September, but they  tumbled in the Bay Area as the region’s super-tight home supply and climbing prices apparently proved a turnoff to some potential buyers.

Down 2.6 percent statewide from a year earlier, pending sales fell 10.5 percent in the Bay Area. They plunged 21.4 percent from October 2016 levels in Santa Clara County and 10.9 percent in San Mateo County.

That’s according to a study by the California Association of Realtors (C.A.R.), which said pending home sales now have fallen statewide for nine of the last 10 months on a year-over-year basis.

The “continued scarcity of inventory” and resultant rising prices “may squeeze the market heading into the close of the year,” the report said.

The study isn’t comprehensive. For one thing, C.A.R. doesn’t have pending sales data for Alameda and Contra Costa counties. Nonetheless, the report — which shows pending sales up 15.1 percent in San Francisco, an anomaly — adds to the continually evolving picture of the region’s affordability crisis.

Earlier this week, a study by the HSA.com mortgage information website reported this daunting factoid: A household income of $216,181 is needed to purchase a median-priced home in the San Jose metropolitan area.That is the steepest income requirement in the nation — more than double the $99,151 needed to buy in the New York City metro area.

The San Francisco metro area placed second among the nation’s 50 most populous housing markets. It takes a $171,330 household income to buy in San Francisco, according to the analysis, which assumes a 20 percent down payment on a 30-year fixed loan.

The San Jose metropolitan area also posted the nation’s steepest year-over-year decline in the number of homes for sale in October — falling by a steep 51.6 percent, according to a report issued last week by Redfin. With buyers fighting over few listings, the San Jose metro also posted the nation’s sharpest year-over-year rise in the median cost of a home: up 19.2 percent to $1,049,000.

Nationally, the home supply shrank for the 25th consecutive month, down 12.2 percent from October 2016, according to Redfin. The Bay Area, it seems, offers an extreme version of a national trend.

Article source: http://www.mercurynews.com/2017/11/22/pending-home-sales-take-another-tumble-across-much-of-the-bay-area/

BERKELEY — As Bay Area residents and others flock to Sacramento to escape the housing crisis, low-income renters in the capital find themselves on shaky ground.

In its first-ever analysis of gentrification in the city, UC Berkeley’s Urban Displacement Project found that an astonishing 95,000 low-income households live in Sacramento neighborhoods that “are already undergoing or are at risk of becoming hotbeds of displacement.”

The project’s newly released maps shine a spotlight on the ripple effect of Bay Area’s upward-spiraling housing costs across 13 Northern California counties encompassing Silicon Valley, Santa Cruz and California’s capital.

“The crisis is touching the entire megaregion,” said Miriam Zuk, a senior researcher who directs UC Berkeley’s Center for Community Innovation. “I’m hopeful that these maps are helping people recognize we need to protect our residents in these neighborhoods.”

Across the 13 counties studied, 900,000 low-income households — 62 percent of the low-income population — lived in gentrifying neighborhoods, researchers found. Far-flung cities such as Antioch and Pittsburg were not immune. In eastern Contra Costa County, researchers noted, the ranks of the homeless grew by 30 percent between 2015 and 2016.

First launched in 2015, the Urban Displacement Project crunches publicly available data to reveal the degree to which low income families are disappearing from traditionally lower-income census tracts. This year, researchers added four counties to the Bay Area map: Yolo, San Joaquin, Santa Cruz and Sacramento.

The latest research didn’t examine what was causing the neighborhood instability. But Sacramento’s rising rents and home prices are widely believed to be fueled by the slow pace of housing development since the Great Recession, paired with an influx of newcomers.

Sacramento — the top destination for those looking to leave the costly, traffic-jammed Bay Area — was the fastest-growing big city in California last year.  About 75 percent of Redfin users moving into the greater Sacramento region come from the Bay Area, according to the real estate site’s analysis.

“Blame it on the Bay Area,” said Sacramento City Councilman Jay Schenirer, whose district includes Oak Park, the poster child for the city’s gentrification challenges. “We have a lot of people moving up here who are paying cash for their homes.”

Unlike Oakland, San Francisco and San Jose, Sacramento does not have rent control ordinances. But as prices soar, a movement to adopt rent caps is building. Rents rose last year by 9.6 percent, one of the highest increases in the nation, and homelessness is on the rise. Schenirer said he generally opposes rent restrictions, but that city leaders were considering alternatives to protect renters.

Ava and Fernando Nadal, who moved from the East Bay to Sacramento decades ago, lost their home in the Great Recession. Now in their 60s, they are among a group of activists fighting for greater renter protections in Sacramento and statewide — even as they have struggled this year to keep a roof over their heads with rising prices and a low supply of available housing.

“This housing crisis is so real,” said Ava Nadal. “The homeless situation is getting worse, and average people like us can end up in that situation.”

Article source: http://www.mercurynews.com/2017/11/22/amid-bay-area-exodus-to-sacramento-low-income-families-at-risk-of-being-pushed-out-study-finds/

Here’s one more dubious distinction for San Jose and San Francisco: The two metro areas are the runaway national leaders in the amount of household income needed to buy a house.

According to a study from the HSH.com mortgage information website, a $216,181 household salary is required to buy a median-priced house in the San Jose metro area, while $171,330 is needed to buy a typical home in the San Francisco metro. That’s assuming a 20 percent down payment on a 30-year fixed loan.

Drawing on third-quarter data, HSH looked at the nation’s 50 most populous metropolitan areas. In the San Jose metro, the median housing price was $1,165,000. With 20 percent down, that leaves a $5,044 monthly mortgage payment. In the San Francisco metro — which includes Contra Costa County, as well as Oakland and all of Alameda County —  the median stood at $900,000 and the typical mortgage payment was $3,997.

The report blames the affordability crisis on the nation’s constricted home supply, which forces prices up and slows sales growth. “There are few signs that the situation will get better quickly or soon,” the report says.

While the Bay Area’s numbers may sound outlandish, the region is an increasingly outlandish place when it comes to housing and earnings.

In April, the U.S. Department of Housing and Urban Development released its 2017 income limits, saying that a family of four can earn as much as $105,350 in San Francisco and San Mateo County and still be considered “low income” — and thereby eligible for affordable and subsidized housing programs. In Santa Clara County, the upper limit of “low income” for a family of four was set at $84,750, while $80,400 was the upper limit in Alameda and Contra Costa counties.

A wide gap separates the San Jose and San Francisco metros from other expensive markets. In Los Angeles, the household income needed to buy a median-priced house is $115,068, according to HSH, while the necessary income is $99,151 in the New York City area, $97,465 in the Boston area, $93,418 in the Seattle area and $84,503 in the Washington, D.C. area.

“Affordability pressures are frustratingly occurring in places where jobs are plentiful and incomes are rising,”  said Lawrence Yun, chief economist for the National Association of Realtors. “Without a significant boost in new and existing inventory to alleviate price growth, job creation could slow in high-cost areas in upcoming years if residents begin exiling to more affordable parts of the country.”

Yun said as much last month when he addressed the annual convention of the Santa Clara County Association of Realtors: “The smartest people in America are all here in San Jose,” he said, but he warned that that may not always be the case. More and more, he predicted, tech companies “will flee” the area and go to more affordable regions of the country.

According to HSH, some of those areas include Atlanta, where a $55,390 household income will buy a median-priced home of $204,300, or Austin, a growing tech center where $67,440 will get a house. Closer to the Bay Area, $50,728 will get a house in Las Vegas and $71,344 will still get a house in Sacramento, a long commuter-ride away from the core of Silicon Valley.

Article source: http://www.mercurynews.com/2017/11/20/216181-thats-the-household-income-needed-to-buy-a-house-in-san-jose-metro-area-report-says/