The median price of a one-bedroom apartment in San Francisco decreased in June — down 11.8 percent from last year, according to a new study from the real estate company Zumper. San Francisco’s rent declines were the largest of any major city in the U.S., and the greatest price drop for the city ever recorded by Zumper.
Of course, San Francisco rents had a high perch to fall from. Even after the recent decreases, the average one-bedroom apartment in the city rents for $3,280, about $300 greater than New York City, and about $1,000 greater than Oakland, San Jose, and Los Angeles.
San Francisco’s double digit rent declines came after local tech companies like Facebook and Twitter told their employees they can work from home “forever,” or close to it, leading industry insiders to speculate about a mass tech exodus from the Bay Area. This study seems to point in that direction, with one-bedroom rents in Mountain View and Cupertino, home of Google and Apple, decreasing by more than 15 percent year over year.
More spacious and affordable cities could be seeing rent increases as a result. “As the pandemic persists, the demand for rentals has continued to shift away from these pricey areas and a significant amount of that demand seems to be moving toward neighboring, less expensive areas,” the study notes. Oakland and Sacramento both posted 5 percent increases year over year, although one-bedroom rents in Oakland declined slightly between May and June.
Another major factor driving rent decreases in big cities across the country is what Zumper CEO Anthemos Georgiades calls “pandemic pricing,” which describes how landlords have been forced to decrease rents due to high unemployment. San Francisco’s high unemployment rate, which remained at 12.6 percent in May, led the Board of Supervisors to extend the city’s COVID-19 eviction ban indefinitely. Now, local landlords are challenging that law in court.
No matter how low rents go, it won’t matter for people who don’t have a job.