Luxury apartment buildings in San Francisco are starting to offer some pretty serious incentives as America's most expensive rental market shows more signs it's on the verge of cracking. Excess supply of luxury apartments in San Francisco is putting serious downward pressure on rental rates as pointed out by Yahoo Finance:

“Listings that once rented in just two to three weeks can now take two to three months to rent,” explains Paul Hwang, principal broker at Skybox Realty, a San Francisco-based real estate agency. At least four new apartment buildings have opened within a three-block radius of one another during the last 18 months in San Francisco’s thriving South of Market neighborhood, which is home to major tech companies like Airbnb, Pinterest and Yelp (YELP). Those four buildings — Jasper, 340 Fremont, 399 Fremont and Solaire — frequently offer some sort of bargain for prospective renters. 340 Fremont is offering six weeks of free rent; Solaire is pitching four weeks of free rent, free on-site storage and $1,000 discounts to renters who work at tech companies like Apple (AAPL), Facebook (FB) and Yahoo (YHOO). Meanwhile, another building, 399 Fremont, even tried giving away free bikes one weekend.

New buildings aren't the only ones offering incentives. Craigslist is also flooded with listings like the one below offering free rent and a $500 gift card to interested renters.

Incentives are starting to show up in the data as well. According to Zillow, YoY growth of rental rates turned negative for the first time in June...

As supply is set to skyrocket...

And employment levels are peaking...

As we've warned multiple times, the San Francisco real estate market is on the verge of imploding. Given the perfect storm of rising housing supply and peaking employment, we're afraid that even a $0 down, 30-year, adjustable-rate, jumbo mortgage backed by illiquid stock options from the San Francisco Federal Credit Union won't be able to save the day.