What’s the Bay Area’s most competitive rental market?

There are few things as frustrating as looking for an apartment that checks all the boxes. If it’s affordable, it’s dark and gloomy. If it’s in a good location, it has mold in the bathroom. And if, by some stroke of luck, it’s perfect, then without a doubt someone else will beat you to it.

Yet it’s easier to rent in some parts of the Bay Area than others. According to a new report, the North Bay/San Francisco Peninsula and the East Bay were the least competitive rental markets in California in the first quarter of the year while Silicon Valley — which includes Santa Clara and San Benito counties — ranked as the fourth most competitive.

The report by national apartment listing service RentCafe analyzed data from 137 rental markets in the U.S. and calculated their rental competitiveness based on a variety of factors: apartment occupancy rate, average vacant days, prospective renters per unit, renewal lease rate and the percentage of new apartments completed during the period.

In the North Bay/San Francisco Peninsula, apartments stay vacant for 44 days, on average, and each vacant unit attracts around seven prospective renters, the report says. In the East Bay, apartments stay vacant for about 43 days, and such units attract around nine prospective renters.

In Silicon Valley, however, apartments stay vacant for only 36 days on average, and there are about 13 prospective renters per vacancy. The national average is 43 days and nine renters, a slowdown from last year’s 36 days and 13 renters.

For apartment hunters, occupancy rates matter, because they signal availability. The occupancy rate is 92.9% in the North Bay/San Francisco Peninsula, 94.1% in the East Bay and 95.6% in Silicon Valley. The national average is 94%. New apartments make up a tiny fraction of the market — 0.4% in the North Bay/San Francisco Peninsula and 0.49% in the East Bay — and an even smaller slice in Silicon Valley, where new construction accounts for only 0.16% of the market, the report says. That’s one home in every 625.

All this data suggests it’s comparatively easier right now to find an apartment to rent in the East and North Bay/San Francisco Peninsula. But renters’ actual experience can be very different, said Anya Svanoe, who works for a housing-focused nonprofit. She was looking for a one-bedroom place in Oakland earlier this year and found the city’s rental market to be very competitive.

“Finding a good, affordable apartment in a pleasant neighborhood here is hard,” Svanoe said. “The first place we liked, they took someone else’s bid. Even the apartment we finally got, they had lots of other people coming in to see it. Had we not signed up as quickly as we did, we wouldn’t have got it.”

University of Pennsylvania graduate student Sandilya Sivaraju, who is in the Bay Area for a summer internship, managed to find a sublet in Berkeley fairly easily. Now he’s looking for a new place to rent through December, and his search through Facebook and Craigslist has been frustrating.

“There are a lot of scams and very few options,” he said. “Maybe people who have been looking for a while are finding places, but for someone new to the region, it’s been challenging.”

And it’s only going to get more competitive, according to Doug Ressler, senior analyst at RentCafe’s sister company Yardi Matrix, which publishes real estate reports.

“The East Bay has a lot of room for growth,” he said. “When we do this report again in another three months, you’ll probably see the East Bay’s market become more competitive, especially as offices move out of San Francisco and into the East Bay, which is less expensive. We also anticipate that property owners who don’t want to lose renters will offer more concessions in the third and fourth quarter of this year.”

For now, none of the Bay Area’s rental hubs are in the report’s list of 20 most competitive markets in the country for the first quarter of 2023. Those spots went to Miami, closely followed by North Jersey. Silicon Valley was ranked 21st. On the other flip side, Minneapolis-Saint Paul, Minnesota, and Seattle’s southern neighbor, Tacoma, Washington, are the least competitive markets in the country, closely followed by the North Bay.

“The Bay Area used to be a magnet for a lot of new employment,” Ressler said. “Well, new employment has stabilized, and the tech industry has downsized. So you don’t have the jobs you used to in the region. But that’s going to change. These things are cyclical. Once the tech industry starts making its comeback, there will be new jobs and more migration to the Bay Area.”