Rents in the San Francisco area have begun to drastically drop much faster than other cities in the country after the devastating economic impacts of the coronavirus pandemic.
Zumper, an online assistance tool that helps people find houses and apartments to rent, revealed in its October report that rents in the city have dropped by 20% compared to last year. The organization observed that a resident could rent an average South-of-Market (SoMa) studio for about $2,056.
Statistics also showed that in Potrero Hill, prices were relatively higher, with studios costing around $2,345. For two-bedroom rents, the most expensive were found in Mission Bay, that net up to $4,372 each.
Rent price listings on Craig’s List also showed similar trends. SoMa houses a 466 square foot studio priced at $2,080 per month and includes two free months. The unit also included a washer/dryer, hardwood floor, and modern appliances.
In Arkansas Street, a renter could get a 700 square foot one-bedroom unit with one bathroom and a washer/dryer for only $2,950 per month. The unit was shown to have carpet and linoleum floors and dated kitchens and finishes.
Apartment List research associate Rob Warnock said that one of the biggest questions moving forward is how much the coronavirus pandemic would have affected the people’s preference for renting in cities. He said that studies found subtle regional shifts but noted there was no overwhelming evidence of massive urban exodus, the Potre Review reported.
In San Francisco, rent listing prices are going down at a steady rate, attracting renters back to the city. The massive decline is a result of the pandemic forcing people out of work, with no choice but to move out. Fewer customers meant that apartment owners did not have the opportunity to be picky with who gets to rent their units.
In September and October, the San Francisco Apartment Association conducted a survey of landlords that found over 20% of their renters broke their leases since the pandemic began. Despite some of the contracts being picked up by roommates and other renters, there has been an average of 15% reported vacancy rate, a massive jump from the 3% observed before the COVID-19 crisis started in March.
The health crisis also forced several residents to flee the city, causing a sharp decline in San Francisco’s workforce. Data showed that job postings in the city dropped by 38.5% compared to last year, surpassing New York City’s numbers, which reported 36.4%.
The price drops are an opportunity for residents who are looking to move into San Francisco for much cheaper than before, the San Francisco Chronicle reported.
While San Francisco has experienced a surge of declines in rent prices, the rents are still relatively expensive for most people to afford. The city has one of the highest prices among major cities in the United States. Real estate observers called the sharp drop in prices as “tech exodus” with companies moving forward with work-from-home settings with their employees.
The city’s coronavirus response plan has been highly successful and enabled the region to slowly recover its economy amid the pandemic. Multiple establishments and businesses, including non-essential offices, have begun to open their doors to the public, albeit at reduced capacities.
This year, San Francisco saw a massive 21% drop in rental prices compared to last year. However, the decline during the months of September and October have been much less at 1% compared to the numbers observed in late summer.
Analysts expect that the next few months would reveal if the influx of people coming back to live in the city could fix what people call San Francisco’s rental market “free fall,” the San Francisco Weekly reported.