SAN FRANCISCO - Bay Area rents are plummeting during the pandemic with some cities seeing the steepest decline in years. For example, in San Francisco, new studies suggest rents are down 20 percent from a year ago.
For the first time in years, renters can get some deals all to entice renters. It’s unheard of since for a long time rents have continually gone up. Before the pandemic, experts said the rent market was hot. It’s no longer competitive as it once was.
“I feel like the rents here are out of control,” said San Francisco Renter Courtney Celia.
Celia lives in a junior one-bedroom apartment less than 500 square feet in San Francisco’s Marina District. She’s in a rent-controlled unit. She knows others aren’t.
“I have a friend who rented in March here in the Marina before Covid and her studio was $2,400,” said Celia. Her friend has since moved to Colorado after her company went remote.
“What we are seeing now are the most precipitous rents that we’ve seen since our data began,” said Apartment List Chief Economist Igor Popov. “San Francisco is really leading the pack.”
According to Apartment List that tracks rents, monthly rent in San Francisco dropped 20 percent from a year ago, the steepest decline in the country. Bay Area wide, in San Mateo and Santa Clara counties rents dropped at least 12 percent from 2019.
“We found that remote work and with the shutdown of small businesses during the pandemic the location has mattered less,” said Popov.
“Some of the landlords are having to make concessions even give some properties a month or two away for free,’ said Scott Poncetta of Keller Williams Los Gatos.
At Rosewalk Apartments in San Jose, the leasing manager said a $1,500 move-in discount is now being offered for any vacant apartments.
Poncetta, helps sells apartment buildings said investors are wary that some renters can’t pay rent during the pandemic. He also said banks are more cautious.
“The amount of money you need to put down on a property to buy one went from 25 percent to 40 percent, that is now kind of the norm,” said Poncetta.
Cities surrounding big tech companies are most impacted.
“Looking for a two bedroom in Sunnyvale when we did a search for two bedrooms in Sunnyvale there were over 100 units available,” said Pancetta. “That has not happened in over 10 years.”
Zumper found the median price of a one-bedroom in San Francisco is $2,800. Many renters believe that’s still unreasonable for the average person.
“I feel the cost of living here is so high,” said San Francisco Renter Jules Victor.
“You can buy a Chanel dress at 20 percent off,” said Celia. “It’s still expensive, that’s the same for real estate. It’s very unattainable for normal people who aren’t making well into the six figures.”
Popov does not suspect rents will fall much lower. He said it depends on the pandemic and what big employers do around remote work. Neighboring affordable markets like Sacramento are seeing more interest, not too far away and more space for fewer dollars.