Economic crises and recessions historically lead to a softening of the rental market. With the COVID-19 pandemic impacting large parts of the economy across the country and here in the Bay Area, experts say it is possible rents will fall once again.
“We’re already hearing that tenants are requesting rent reductions because the market for housing just isn’t what it was six weeks ago,” says Charley Goss with the San Francisco Apartment Association, which represents city property owners.
And despite state and countywide eviction moratoriums protecting residents who are unable to pay their rent, many are leaving on their own.
“We surveyed 315 members last week, and found that 16% of property owners surveyed had renters who had moved out of the city due to COVID-19,” says Goss, who expects the vacancy rate in San Francisco to go up.
All of those empty apartments are likely going to sit vacant until shelter in place orders ease up.
“Folks can’t really look at apartments, go to open houses, or move right now,” says Chris Salviati. He is a housing economist with the online rental marketplace Apartment List, which is based in San Francisco.
Salviati says a coronavirus recession could cause rents to fall fall, but not where it is needed most.
“There may be a lot of folks who are actually looking to make downgrade moves or looking for more affordable housing. If that plays out, there might be a lot of increased competition for that more affordable segment of the housing stock.”
