Berkeley, California Multifamily Market Report
Market Overview
Berkeley is one of the East Bay’s largest multifamily submarkets, with a presence of over 18,000 units. The presence of the University of California in Berkley significantly influences the rental market, with over 42,000 students enrolled and only about 7,000 on campus. This fuels a substantial demand for off-campus housing. As of Q4 2023, occupancies in Berkeley are at 89.8%, trailing pre-pandemic averages and the long-run average of 94.5%. Asking rents currently command a premium over the market average, but high inflation and expected larger deliveries in the future could impact rent growth. Historically, opposition to development has slowed construction, but sentiment seems to have waned.
Highlights
- Berkeley saw an average annual volume of around $262 million over the past five years.
- Asking rents are reaching $2,692 per unit, which is a premium over the market average of $2,370 per unit.
- Downtown Berkeley has been a significant center for development, driven by proximity to transportation hubs and the University of California.
- The current vacancy rate of 10.2% is above the five-year historical average of 9.0%.
Rents | Vacancy | Construction
Berkeley has a higher proportion of renters, accounting for approximately 60% of households, well above the metro average.
Berkeley’s current average asking rents are $2,692 per month, placing it among the metro’s top submarkets for average rents per unit. Current year-over-year rent growth stands at -0.5%. Apartments closest to UC Berkeley and the Downtown Berkeley Bay Area Rapid Transit (BART) station command a premium, paying approximately 30% more than renters in the western half of the submarket and over 50% more than renters in the northwest Albany neighborhood. Vacancies in Berkeley stand at 10.2%, showing an increase of 0.9% over the past year. Approximately 960 units have been delivered in the submarket over the past five years. An additional 445 units are in the development pipeline as of Q4 2023, representing a 2.5% inventory expansion.
Sales
Berkeley, By the Numbers in the Last 12 Months
Source: CoStar Group
- Sales Volume: $57.6M
- Vacancy Rate: 10.2%
- Units Delivered: 231
- Average Price Per Unit: $440K
- Rent Growth: -0.5%
The 12-month sales volume in Berkeley amounts to $57.6 million in transactions across 17 deals. The submarket’s average market price per unit is now $440,000, representing a substantial premium over the East Bay metro average of $380,000 per unit. A notable transaction over the past year includes the sale of the Alcatraz Apartments in mid-2022 as part of a 13-property portfolio for $69 million, or $255,000 per unit.
