SAN FRANCISCO (KRON) — San Jose and San Francisco made Zillow’s top 10 list of metros forecasted to have the highest rental appreciation over the next year, according to a rent forecast analysis released Friday.
San Jose topped the list at 7.8 percent, while San Francisco came in third at 5.9 percent. Sacramento tied for eighth with Austin, Texas at 3.4 percent rental appreciation.
Overall, Zillow’s forecast analysis predicts rents will flatten in 2016. They are predicted to go up just 1.1 percent, going from a Zillow Home Value index of $1,381 to $1,396.
“The slowdown in rents means that, by the end of the year, they will be rising at a slower pace than incomes in many markets,” the rent forecast analysis said.
Rents in San Francisco increased 12.5 percent in 2015, the report said.
“Even with the slowdown, rents will remain unaffordable in many of the major markets across the U.S., especially on the West Coast,” according to the report.
Renters in San Francisco and Los Angeles are expected to spend about 40 percent of their income on paying rent.
Here is the top 10 list of metro areas predicted to have the highest rental appreciation over the next 12 months:
1) San Jose, Calif. – 7.8%
2) Buffalo, N.Y. – 7.4%
3) San Francisco, Calif. – 5.9%
4) Seattle, Wash. – 4.5%
5) Denver, Colo. – 4%
6) Portland, Ore. – 3.8%
7) Miami-Fort Lauderdale, Flo. – 3.5%
8) Austin, Tex. & Sacramento, Calif. – 3.4%
9) Louisville-Jefferson County, Kent. – 3.2%
10) Los Angeles-Long Beach-Anaheim, Calif. – 2.8%