By Eve Mitchell
Contra Costa Times
Rents are climbing sharply in the East Bay as people who were once homeowners look for places to rent after losing their homes to foreclosure or not being able to keep up with their mortgage payments.
Rents are rising even faster in Santa Clara and San Mateo counties as tech-driven employment continues to create increased demand for apartments, said a report to be released Thursday by RealFacts.com.
Both areas saw rents return to their pre-recession highs.
“In the Santa Clara and San Mateo area, given the importance of the technology industry, the rate is growing, there is more demand, and vacancy rates are especially low in Santa Clara County. … That creates pressure on the rental market,” said Jed Kolko, chief economist for San Francisco-based Trulia.com, a website for home sales and apartment rentals.
“But even in places where the economy isn’t doing as well, we are still seeing increases in rent because homeownership has gone down. And that means that more people are in the rental market,” he said.
The rankings are based on asking rents for all types of apartments ranging from studios to three-bedrooms in large complexes that have 50 or more apartments.
The report also listed the Bay Area, which RealFacts defines as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties, as showing the biggest quarter-to-quarter gains in rents among 47 metro areas nationwide. The region’s average rent of $1,697 was up 3.3 percent from the second quarter and 9.7 percent higher than a year ago.
But while the Bay Area tops the list on a quarter-to-quarter basis, Santa Clara is the leader on a year-to-year basis.
“The Bay Area definitely outperforms all other markets, and if you look at Santa Clara County year-over-year it’s approaching 13 percent, which is unprecedented growth for what’s happening overall in our economy,” said Sarah Bridge, owner of RealFacts.
In Santa Clara County, the average rent for an apartment in the three-month period ending in September was $1,792, up 1.8 percent from the previous quarter and 12.9 percent higher than a year ago. San Mateo County had an average rent of $1,866, up 2.8 percent from the previous quarter and 10.7 percent higher from a year ago.
In Alameda County, the average rent was $1,490, up 1.8 percent from the previous quarter and 8.7 percent higher than a year ago. In Contra Costa County, the average rent was $1,342, up 2.8 percent from the previous quarter and 7 percent higher from a year.
In all four counties, rents were higher than they were in 2007. The recession arrived in December that year and officially ended in June 2009.
Many cities in the Bay Area showed double-digit rent increases compared with a year ago, the report said.
The highest year-to-year percentage increase in the region was in Cupertino, where rents rose 17.9 percent to $2,249, followed by Mountain View, where rents climbed 16.3 percent to $1,876. Rents rose 13.8 percent to $1,979 in San Mateo, and 12.4 percent to $2,083 in Foster City.
In the East Bay, the city that had the biggest year-to-year percentage increase was Newark, where the average rent increased 13.7 percent to $1,547, followed by Pleasanton, where rents rose 13.3 percent to $1,748. Rents climbed 11.3 percent to $1,415 in Pleasant Hill, followed by Walnut Creek, where rents rose 11.1 percent to $1,551.