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Looking to rent in Palo Alto or Mountain View? Goodluck. The cities rank among the Top 10 most competitive rental markets in the nation and No. 1 in California, according to a newly released report from RentCafe.
For every vacant apartment, there were 12 prospective renters vying for the space in 2024. In comparison, there were seven prospective renters for every vacant unit in the North Bay Area market (which extends from San Francisco down to Redwood City) and an average of nine per unit nationwide. In Miami, the nation’s most competitive market, there were about 18 prospective renters per vacant unit.
The report analyzed 139 rental markets nationwide and gave each a “competitive score” ranging between one (the least competitive) to 100 (the most competitive) based on the number of days apartments stayed vacant, the percentage of rentals that were occupied, the number of prospective renters competing for an apartment, the percentage of renters who renewed their leases and the share of new apartments constructed during the year.
Silicon Valley market: Palo Alto, Mountain View
Palo Alto and Mountain View, which are part of the report’s Silicon Valley market that also includes Sunnyvale, Cupertino, Campbell, Santa Clara, San Jose, Milpitas and San Benito, earned a competitive score of 80.9, up from 73.4 in 2023.
According to the report, apartments in the region saw a quick turnaround: On average, units stayed vacant for just 35 days. The region also had a high occupancy rate with 95.5% of all apartments occupied.
The report attributed lack of available units as a key factor in driving the competition. Construction of rental units increased only slightly last year, with 1.84% new units coming to the market.
“This has not kept pace with demand,” the report states.
The lease renewal rate surged to 54.6%, up from 47.9% the previous year, further limiting available options for new renters.
North Bay Area market: Redwood City, San Mateo
In contrast, the report's North Bay Area market (San Francisco, Santa Rosa, San Mateo, Daly City, Foster City, Napa, Rohnert Park, Redwood City, Petaluma and San Rafael) saw a number of new units coming to the market that helped to ease supply constraints and provide a less competitive environment for renters. The share of new units in the region nearly doubled to 3.11% in 2024. The report gave the region a score of 65.4. Apartments in this market remained vacant for 42 days, giving renters more time to secure a unit. Lease renewals grew slightly to 48.8%, up from 47.6%, and the number of potential renters vying for the same unit declined from eight in 2023 to seven last year.
California and nationwide
The national competitive score of all markets combined is 74.4, or about 6.5 points below Silicon Valley and nine points higher than the North Bay Area market.
Overall, 32% of the markets analyzed have become more relaxed compared to 2023. On average, it now takes 40 days for a vacant apartment to be rented, with nine prospective renters competing for each available unit. That’s two days longer than one year ago (38 days), when the same number of apartment-seekers were vying for each vacant unit, the report states.
While the Silicon Valley market ranks among the most competitive markets, California is less competitive than other regions across the nation.
The report found that the Northeast is the most competitive region in the nation with a score of 79.2. Florida comes next with a score of 78.2, just ahead of the Midwest, which has a score of 78.1. Further down the list, California has a score of 73.1, followed by the Southwest (71.1) and the West ( 70.7). The Pacific Northwest ranks as the least competitive with a score of 68.9.
Information taken from RentCafe's "2024 Year-End Report: Miami’s Competitiveness Wanes With Suburban Chicago and Milwaukee Closing In" by senior writer and researcher Veronica Grecu.
