Report: Silicon Valley rental market tightens

Silicon Valley has surged to the 6th spot as the nation’s most competitive rental market, with 12 renters vying for each apartment amid a 95.1% occupancy rate, according to a new RentCafe study.

Fueled by a resurgent tech sector and significant investments in AI, Silicon Valley has skyrocketed to become the nation’s sixth hottest renting spot, up from 21st place just a year ago. 

Faced with limited options, more than half of the apartment dwellers in the Silicon Valley — or 54.1% — renewed their leases, further intensifying the competition for available units.  

All these factors combined resulted in a Rental Competitive Index (RCI) score of 80.8 for Silicon Valley, significantly above the state’s average score of 72. 

What propelled Silicon Valley so high on the list of most competitive markets this year? 

• With an occupancy rate of 95.1% and no new units recently introduced, options are scarce, causing vacant apartments in places like Palo Alto, Cupertino, Mountain View, Menlo Park, Sunnyvale, and San Jose to attract 12 prospective renters, on average. 
• The area’s limited supply situation is also lead by a surge in lease renewals, with the rate jumping 8.4 percentage points from last year to 54.1% at the start of the 2024 rental season. 

• This resulted in an Rental Competitive Index (RCI) score of 80.8 in Silicon Valley, surpassing both the national average of 73.4 and the state’s average of 72.6.   

  Elsewhere in the Bay Area: 

• In North Bay, there are seven people competing for each available apartment, amid an occupancy rate of 93%. About 48% of the existing renters renewed, especially as the local supply of apartments only increased by 0.58% recently. This led to an RCI score of 67, below California’s RCI score of 72.6. 
• In the East Bay, the occupancy rate is slightly higher at 93.4%, and there are nine prospective renters competing for an apartment. Also, more renters renewed at the start of the moving season (50.5%), and the housing stock increased by 0.54% in recent months. Overall, the East Bay has an RCI of 66.8, making it slightly less competitive than North Bay. 

The full report is here: https://www.rentcafe.com/blog/rental-market/market-snapshots/us-hottest-rental-markets/ .