It can’t be this bad forever, they said. The rents will fall, they said. San Francisco will return, they said.
If you’re not bringing in startup-unicorn level cash and hope to live in the city one day, or at least in a cheaper apartment, we have some good news to report: San Francisco rents dropped 5 percent between June and July. That’s according to a national report released today by the apartment listings site ABODO. And while that might not be a game-changer for many folks, ABODO sees it as a trend that could carry on for months.
“While a large portion of the country is running significantly short on apartment rental supply, our research team is seeing a larger supply than ever before in San Francisco,” Sam Radbil, an ABODO spokesman, tells SF Weekly. “The huge amount of building in this metro area is providing more options for renters. The supply is finally catching up with the demand, causing a decline in price. We believe that this is a trend that may continue in San Francisco throughout the rest of 2016.”
It’s true that housing construction has increased in recent years — just take a gander at the city’s dense Pipeline Report — and some people say more homes means lower prices, eventually. So have we entered this new phase of affordability? (You didn’t actually think we were serious.)
Maybe, maybe not. It’s hard to say. Stories like this one could just be an outlier, but if demand is so high then why would a developer abandon an already approved project?
Regardless, as Curbed pointed out, two approved projects put up for sale does not make a trend. One month of rent price declines probably doesn’t either, but it’s still significant for San Francisco.
“We anticipate that the rent growth might begin to slow in cities like San Francisco — cities that have experienced rapid recent growth — because of the huge boom in multifamily construction,” Radbil says. “The development and construction of new rentals will ultimately bring more units to market for local renters and limit the demand for individual units, while minimizing leverage that landlords currently hold.”
ABODO also found that rents in Oakland dropped as well, and even more significantly at 11 percent.
That’s promising for Bay Area renters — especially when we have a group from San Francisco that sued a nearby city over its lack of housing construction, then threatened to “sue the suburbs” unless more shovels went in the ground.