San Franciscans looking for double-digit price gains in real estate don't have to search far.

The city's rental market has shown remarkable resilience even as home sales dropped to their lowest level in decades and median home prices have begun to decline after years of seemingly unstoppable growth. "The rental market and the housing market don't always move in lockstep," said Jeffrey Mishkin, first vice president of Marcus & Millichap Real Estate Investment Services. "Housing prices aren't driven by the same factors as rental prices."

The strength of the region's economy, a lack of new rental units being built and high gasoline prices, which increase demand for close-to-work housing, are three significant reasons that rents have continued to climb even as the for-sale housing market has hit the skids, economists said.

Over the past year, the average rent for a San Francisco apartment climbed 9.6 percent to $1,926 month, according to Marcus & Millichap, which is based in Encino (Los Angeles County) and brokers sales of apartment buildings in San Francisco and other cities.

The vacancy rate in San Francisco was 4 percent at the end of the second quarter, according to Marcus & Millichap. The strong growth is counter to price declines seen in the for-sale market. San Francisco's housing market had its worst May in 20 years while the median price for a house or condo in San Francisco dropped 5.4 percent from the same period a year earlier, according to DataQuick Information Systems. DataQuick will release information on June sales this week.

San Francisco is one of just a handful of cities that is posting rent gains, according to Mark Zandi, chief economist and co-founder of Moody's Economy.com. "The national housing market is just awash in space and that is weighing on both prices and rents," Zandi said. "During the housing boom, we simply overbuilt."

Marni Leff Kottle, Special to The Chronicle

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