Drastic Drops: Median San Francisco 1-Bedroom Rent Down Nearly 12% Amid COVID-19 Pandemic
SAN FRANCISCO (CBS SF) – Rents for one bedroom apartments in San Francisco in June were down nearly 12 percent from this time last year, one of the clearest signs yet on how the coronavirus pandemic has impacted the Bay Area rental market.
According to an analysis from rental website Zumper, the median rent for a one bedroom dipped to $3,280 in June, down 2.4 percent from May and down 11.8 percent from June 2019. Meanwhile, the median rent for a two bedroom in San Francisco dipped to $4,340 a month, down 9.6 from June of last year.
"This is the strangest downturn I've ever seen," J.J. Panzer with the Real Management Company told KPIX 5.
Rent in Oakland dropped 2.1 percent last month. In San Jose, rent went down 5 percent.
"Your landlord, given the widespread nature of the job loss, actually does have an incentive to negotiate lower rent with you," said senior Zillow economist Skyler Olsen.
That time to negotiate is now. With the extra $2,400 per month in federal unemployment benefits set to expire at the end of July as part of the Cares Act, some analysts believe additional vacancies and broken leases could be on the rise.
"The numbers that will really be interesting to see, said Olsen. "And we'll know better by the end of August just how much the impact on rental markets could be, moving forward/"
Experts say increased inventory is allowing renters the opportunity to ask for 10-to-15 percent in reduction in some cities like San Francisco, but not in others.
"The number and percentage of people asking for a deferral is higher overall, but we've also had more success in renting units in the East Bay. Units seem to be renting a little faster and with more urgency in the East Bay than in San Francisco," said Panzer.
"Vacant units have no value coming upstream to pay their property taxes and their mortgage and that value as part of the system," said Olsen.
Analysts pointed to a couple of factors for the steep drops in rent, including high unemployment and more companies having employees work remotely, driving down the demand for living in high-cost cities.
San Francisco made national headlines last year after the same website found rents for a one bedroom in the city rose to nearly $3,700 a month, by far the highest in the country.
Other Bay Area communities are also seeing double digit drops year-over-year, particularly along the Peninsula and parts of the South Bay near major tech giants, Zumper CEO Anthemos Georgiades said in a series of tweets about the company's new data. One bedroom rents are down 15.1 percent in Google's hometown of Mountain View, 13.5 percent in Menlo Park, where Facebook is headquartered and 15.7 percent in Cupertino, where Apple is based.
Meanwhile in San Jose, the median one bedroom rent in June was $2,300, down 8 percent from last year.
The rental drops come as the COVID-19 pandemic led to massive job losses, with more than two million jobs lost in California alone. At the same time, tech companies who have largely been working from home during the pandemic are looking to boost those options, with some even allowing employees to work from home indefinitely.
"As the pandemic persists on, 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 company said on its blog.
An example of this trend may be taking place in Oakland, Georgiades noted, where one bedroom rents dipped slightly in June to $2,300, but are actually up 4.5 percent compared to last year. Up the road in Sacramento, median one bedroom rents went up 5 percent in June to $1,360 / month and are up 8 percent from a year ago.
Nationally, Zumper found the median rent for a one bedroom grew 1 percent in June to $1,229 a month, while the median two bedroom rent grew 0.8 percent to $1,485.
Highest One Bedroom Median Rent Prices (Bay Area Locations in bold):
1. San Francisco ($3,280 / month)
2. New York $2,890
3. Boston $2,410
4 (tie). Oakland $2,300
4 (tie). San Jose $2,300
6. Washington, DC $2,270
7. Los Angeles $2,150
8 (tie). Miami $1,800
8 (tie). Seattle $1,800
10. San Diego $1,750
Kenny Choi contributed to this story.
