Living in the Bay Area isn’t cheap, especially if you’re looking to rent in Berkeley. Before you shell out thousands per month, understanding the type of home to target is key. There’s a stark contrast between professionally managed apartments and private rental homes, although their rental prices can be almost the same.
Real-estate firm Zillow currently estimates Berkeley’s median rent at $3,772 per month, a big figure for most to gulp. That compares to $3,402 for the greater San Francisco metro area, and a calmer $1,411 national average.
Despite the high rents, the Bay Area rental market is actually softening. In February 2015, Berkeley’s average rent was up 32.4% year-over-year, according to Zillow. But rental price growth significantly tapered in 2016, thanks, in part, to low interest rates compelling people to buy instead. Now, Berkeley rents are up just 3% annually, and down 1% quarterly.
What the average budget buys today differs, particularly when you factor in rent control, said ASK Rentals broker Kimmi Kataria. She specializes in helping property owners list their rentals – many of whom have been working with her for 15 years or more.
Kataria said that some people don’t realize that in Berkeley, as is the case elsewhere, any newly constructed housing is not subject to rent control.
“Things that are not under rent control are going to be more expensive, newer, with more appliances and laundry in unit,” she said. “But you have the other side of Berkeley under rent control – which you could call older and charming.”
Rentals around $3,800 per month
A $3,800 rental budget doesn’t leave renters pigeonholed to one particular style: they can choose between a modern apartment or a private rental home. While the prices are similar, renters may forgo contemporary comforts for yard space, or vice versa.
For instance, at the Parker Berkeley, a newly built, four-story apartment building with an Equinox gym opening onsite soon, 1-bedroom apartments can be rented for $3,225 a month. A 2-bedroom at the Parker, that comes in at 1,101-square feet, costs a steeper $4,550 a month.
Kataria, speaking generally, noted that private laundry is a “big pull” for renters and often commands more expensive rents.
By comparison, a 2-bedroom, 1-bathroom bungalow on Juanita Way is currently available for $3,800 per month. The description touts the home’s formal dining room, large sunny backyard, fireplace, high ceilings and vintage charm. At 1,123 square feet, its price and size is comparable to the newer units coming on the market.
Meanwhile, at the Higby in Southwest Berkeley, a 2-bedroom unit of just over 1,000 square feet is renting for $3,700 a month. Residents have access to a rooftop deck, lobby with lounge, bocce ball court and fitness studio in a LEED Gold certified building.
Small, multifamily rentals seem to be the most affordable options for renters right now. For instance, ASK Rentals has a 2-bedroom home on Shattuck Avenue for $2,650 a month.
Despite the steep rents, many private property owners aren’t exactly capitalizing on Berkeley’s hot demand, Kataria argues.
“That’s the fundamental misconception,” she said. “If somebody’s got a 4-plex, and half the building is under rent control, they may be just breaking even.”
Rent control isn’t exactly alluring to new lessees forced to pay far more than their neighbors in similar units. Kataria said many renters are testing out Albany and El Cerrito, where BART access and local conveniences still offer a high quality of life.
“People are sidestepping into neighboring cities if they don’t have to be in the city of Berkeley. In Albany, instead of having two units at $700, all four units are priced at $2,000. Everybody is paying the same kind of rent which makes it more affordable for the average person.”
Like any real-estate market, prices are subject to seasonality. In the summer season, defined as April through September, rents are generally higher than they are during the winter. Near UC Berkeley, May is a peak vacancy month as students leave campus for break.
Seasonality aside, Kataria said the market is reaching a plateau. She said she sees fewer new renters coming in from outside the Bay Area compared to years past.
“Vacated units used to rent very quickly — that’s not happening anymore,” she said. “Rents, in general, are softening, and I think they are going to soften through the summer.”