San Francisco rents are doing an old-fashioned hill bomb: down and to the right, fast.
As vulnerable tenants around the city fret over the specter of eviction, median rents for one and two bedroom apartments in the city are now 20 percent lower than they were a year ago, and 24 percent lower than their all-time peak. Rents have dropped over 6 percent in the past month alone, after being relatively stable over the summer, according to the latest report from real estate analytics company Zumper.
All that being said, San Francisco rents are still not cheap. It remains the most expensive major city in the U.S., with median one-bedrooms renting for $2,830 and two-bedrooms going for $3,800. However, if current trends persist, San Francisco could soon be overtaken by New York as the most expensive city in the country.
Other expensive cities like New York, LA, Seattle, and Washington, D.C. have seen rents decline between 11 and 14 percent year-over-year, which is approximately where San Francisco was over the summer. Perhaps for some people, the smoke of this year’s extreme fire season was the straw that broke the camel’s back.
In the Bay Area, San Francisco’s rent drop is matched by similar declines in Cupertino, Mountain View, Sunnyvale, Menlo Park and other Silicon Valley towns. Oakland one bedroom rents are down 14 percent, and San Jose one bedrooms are down 9 percent.
On the other end of the spectrum, one-bedroom rents in Antioch are up 7.6 percent year-over-year, with Richmond and Concord also posting small gains. Even farther afield in Sacramento one-bedroom rents are up 8.5 percent, and two bedrooms are up nearly 14 percent.
The new report suggests a continuation of trends from earlier in the pandemic. The Bay Area’s lax and long-term work-from-home policies seem to be contributing to a “tech exodus,” as evidenced by the steep rent declines in Silicon Valley and San Francisco proper. Many of these residents appear to be heading to other regions or more spacious suburbs like Antioch or Sacramento — if the latter can be called a suburb of the Bay Area.
Despite the drop in rents, certain economic indicators in the Bay Area remain strong. Tech hiring is “on fire again,” Zumper CEO Anthemos Georgiades wrote on Twitter. IPOs and VC cash aplenty are raining down on the region, as SF Weekly reported yesterday. But during the new normal, that doesn’t necessarily translate to rising housing prices. For those fortunate enough to still have a job, lower rents and a recovering economy could be a win-win.