San Francisco metro area residents paid record median rent in August, but there was a glimmer of good news: the pace of year-over year rent increases rose at the slowest pace since June 2014, Zillow said Tuesday.
The Zillow Rent Index for the San Francisco metro area stood at $3,313 in August, up 13.3 percent from August 2014.
That put San Francisco in second place nationally for highest median rent — surpassed only by the San Jose metro area, which had a Zillow Rent Index of $3,401 in August, up 9.5 percent from August 2014.
The San Jose area’s 9.5 percent year-over-year increase in August median rent marked the first month the Silicon Valley metro area’s year-over-year increase in median rent was below 10 percent since April 2014, according to Zillow data.
The Zillow Rent Index is the median rental value of all the rent zestimates in an area.
The Bay Area’s slowing pace of rent increases reflects a national trend, which the Associated Press covered.
Zumper, a venture-backed startup focused on creating a more efficient apartment rental market, says the level of venture capital pouring into the region is a key factor in San Francisco’s high rents.
Zumper pins one-third of San Francisco’s rents on venture capital financings in the region.
“At the end of the day, we had an adjusted R-squared correlation of 0.83 for venture capital investment. It’s very strong,” Devin O’Brien, head of Zumper marketing told TechCrunch.
That will come as little surprise to those who managed not to sleep through their Econ 101 class. Housing costs have a strong correlation, if not the strongest, to job creation.
What’s one of the first things entrepreneurs do when they get venture funding? Hire.