As we've pointed out numerous times in recent months, real estate in America's largest metropolitan areas like New York and San Francisco looks to be rolling over in a big way. Earlier this week we pointed out that the volume of apartment sales in New York was down 20% YoY in 3Q 2016 as buyers disappeared while sellers, who have grown accustomed to selling above asking price, were slow to concede pricing concessions (see "NYC Real Estate Bubble Bursts As Apartment Sales Crash 20%"). Now, the Wall Street Journal seems to be catching on to the carnage noting that residential rental rates have collapsed in San Francisco, San Jose and New York.
“San Francisco and New York are leading the way in the downturn,” said Ken Rosen, chairman of the Fisher Center of Real Estate and Urban Economics at the University of California at Berkeley. “People are going to be surprised that this is happening but they shouldn’t be. It’s been too far, too fast.”
The rental market is coming off its biggest boom in decades. The foreclosure crisis, along with a trend toward urban living, has created seven million new renter households since the housing-market peak in 2006, as the home ownership rate declined to 51-year lows.