Housing

Report: Bay Area home to luxury renters

June 21, 2024

While the Bay Area battles to create affordable housing, there is another segment of the market lapping up luxury rentals.

Affluent lifestyle renters skyrocketed in the past years, according to a new report from Point2Homes. And those renters want more — modern amenities, extra space, and no mortgage hassles — all driving up the demand for luxury single-family rentals across the country.

According to historical Census data, 10.9 million renters lived in single-family homes in 2001, making up just under 30% of all renters. By 2022, there were 14.3 million single-family renter households, accounting for about 32.5% of all renters.

For the study, Point2 analyzed the inventory of single-family homes for rent in the 100 largest U.S. cities, taking into consideration the cities with at least 50 listings. Based on prices, two categories were identified: Tier 1 (Luxury Houses for Rent) with monthly rental rates above $5,000 and Tier 2 (Ultra-Luxury Houses for Rent) with monthly rental rates above $10,000.

In San Francisco, 36.92% of homes qualified for the luxury category, while San Jose had 22.49% in the same tier. And, with shares of luxury rentals above 10%, Oakland also secured a spot in the top 20 most glamorous rental markets in the state. In the ultra-luxury category, San Francisco had the fourth-highest number of rentals in the nation as 12.31%

The Point2 report analyzes the rental inventory to see which of the 100 largest U.S. cities offer the highest shares of luxury single-family houses for rent. Here's what stood out for California:

The Luxury Tier: California dominates the top 10 with five cities having highest shares of luxury single-family rentals. Irvine is in the lead with 74% of its rentals classified as luxury homes, followed by Los Angeles with nearly 60%.

The Ultra-Luxury Tier: The state tops the list once again. Los Angeles leads this category with almost 29% of its single-family rentals, followed by San Francisco.