Are San Francisco rents showing first sign of return to 'normal'?
Apartment rents rose across San Francisco, San Jose and Oakland in January, the first price growth since the coronavirus pandemic erupted last spring, according to a new report.
San Francisco’s one-bedroom median rent was up 0.8% to $2,680 per month from the prior month, the first increase since April 2020, according to real estate listings company Zumper. San Jose was up 1.9% to $2,130 per month, and Oakland spiked 2.6% to $2,000 per month, both compared with the prior month.
San Francisco’s rents have still plunged 23.9% from the previous year, while Oakland fell 19% and San Jose was down 12.7%, according to Zumper. The widespread embrace of remote work, particularly in the tech industry, has upended a housing market that appeared unstoppable, fueled by nearly a decade of record job growth and business expansion.
In contrast, more affordable cities such as Miami and Austin have seen a spike in renter interest, though rents have also fallen there, Zumper said.
A separate report by Apartment List found that San Francisco had a monthly median rent drop of 0.4%, a smaller decline compared to recent months. Apartment List’s methodology differs from Zumper and incorporates Census Bureau data.
San Jose is now the third-most-expensive U.S. market and Oakland is the fourth-most-expensive, while Boston dropped to fifth. San Francisco retained its top spot over New York.
January’s increase wasn’t entirely unexpected: In late December, Zumper published a report showing that renter interest in San Francisco and the Bay Area had rebounded somewhat after sagging at the beginning of the pandemic.
“It’s difficult to distinguish whether Bay Area gains are due to post-holiday seasonality or a trend reversal at this point, but there has been a significant increase in renters interested in moving to the Bay Area on our platform,” said Neil Gerstein, a Zumper analyst.
Other housing experts said a seasonal lull in demand is likely pushing prices up.
“Every year from around Thanksgiving to New Year’s, there’s a notorious lull, even in a strong owner’s market,” said Charlie Goss, government affairs manager at the San Francisco Apartment Association, a landlord group. “What could be happening is people hunkered down over the holidays and now they’re starting to look.”
The national median rent was up 0.3% for one-bedrooms in January, while two-bedrooms were flat, compared with the prior month.
“It’s likely too early to determine if this is an inflection point for prices in the Bay Area, it certainly could be,” Zumper said.
To produce its rental reports, Zumper analyzes data from over 1 million active listings across the United States. Data is aggregated monthly to calculate median asking rents for the top 100 metro areas by population. https://www.sfchronicle.com/business/article/Bay-Area-apartment-rents-rise-for-first-time-15902724.php