SAN FRANCISCO, Calif. - San Francisco’s absurd rent prices are becoming more realistic, new evidence shows.
Urban, high-priced areas are seeing dips in rent cost when compared to last year and the Bay Area is no exception, according to a September rent report from listings website Realtor.com. San Francisco leads the nation in rent declines for studio, one-bedroom and two-bedroom apartment rentals.
The sharp drop highlights the impact of the coronavirus pandemic on renters’ preferences. Many residents in the Bay Area, where rental prices are some of the highest in the country, shifted to remote work earlier this year, prompting some residents to size up or get out.
“What we’re seeing during this pandemic is a reevaluation of priorities. Inherently for the market, we’re seeing a repricing,” said Realtor.com Senior Economist George Ratiu. “Broadly speaking, the driver is this pandemic-induced shift in work.”
But the drop in rent cost doesn’t necessarily equate to mass departure, according to Ratiu, who said they’re seeing folks take advantage of tech companies extending remote work options into 2021. Combined with the drop in cost, many tech workers are moving into a new, more spacious place at a price they couldn’t get prior to the pandemic.
Median studio rents in September declined by 31 percent year-over-year to $2,285, according to the report. One-bedroom apartments dropped by 24.2 percent to $2,873 and two-bedroom units reduced by 21.3 percent to $3,931.
In San Meteo and Santa Clara counties, one-bedroom apartments dropped at least 11 percent and two-bedroom units declined at least 9. The three Bay Area counties make up the top five largest decreases in studios and the top three for one and two-bedroom apartments.
As new developments take place in the fight against the virus, some workers will return to work, but likely not in the same capacity as before. Experts predict the trend of declining rent in the three counties will continue as companies signal that a hybrid form of working is likely to become more permanent.
And now that there’s been a significant reduction in rent cost, San Francisco could become more desirable for renters who previously considered a move but didn’t because of sky-high prices.
“San Francisco, along with its East Coast counterpart Manhattan, have been two fortunate metros where people are willing to pay a premium for the experience of living there,” said Ratiu.