Another Sign of Accelerating Price Inflation: SF Apartment Rents Getting Crazy

nRents are soaring in San Francisco.The city always has been expensive place to live because of rent control distortions, but prices are heating up.

"You have to pounce as soon as you see an ad you like," said Chris Covert, a manager at Symantec who was among 18 people vying for a $1,395 Nob Hill studio last week. "It's definitely nuts,"  reports the SF Chronicle.

The money flowing into Silicon Valley is spreading beyond the Valley.  The SF Chronicle continues:

Driving the demand is a new wave of tech workers at the city's rapidly growing social media and technology companies...

The net result is that vacancy rates are falling and rents are rising in the city. RealFacts says that the average monthly asking price in San Francisco for studio apartments in complexes with at least 50 units hit $1,801 this year, up 13 percent from $1,595 a year ago. Across apartment units of all sizes, landlords at these big complexes are now asking for an average of $2,361 a month, up 5 percent from a year ago.

Marcus & Millichap said the city's vacancy rate is now 4.2 percent, compared with 4.8 percent in 2010 and 5 percent in 2009.

How long has this been going on?

"It just took off two or three months ago," said Dennis Roybal, a property manager with Chandler Properties, which manages 5,000 units in the city.

Just when the money supply started to grow. Not an accident. If the money supply growth continues, expect what is happening in San Francisco to spread to other cities. We are on the verge of a major inflation.