San Francisco rents have dropped dramatically during the pandemic.
A new report from ApartmentList.com found that the city’s rents have dropped by 27% from last January, more than any other city in the nation. The median price of rent for a two-bedroom apartment declined by over $800, from $3,147 to $2,305.
The city’s vacancy rate more than doubled by the summer from 5% in March to nearly 12% in August, demonstrating a precipitous drop in demand as many people continue to work remotely and most of the city’s businesses are at limited operations, if not completely closed.
But that has not had a ripple effect across the whole Bay Area, with rents in Walnut Creek dropping by only 3.1% in 2020.
“They’re leaving San Francisco, coming out here, getting a better price on the rent and being able to work out of the house,” explained Alex Khodadad, a realtor based in Pleasant Hill. “So in the last year, rents really haven’t gone up but they really haven’t gone down either.”
ApartmentList.com found a similar effect in suburbs and more affordable midsize cities nationwide, some of which have seen rents grow by nearly 10% as people take advantage of remote work and looking for more space.
Khodadad says part of the reason for an increase in vacancies is that many people who have not felt the economic sting of the pandemic are taking advantage of lower interest rates to buy their first homes.
“They’re sitting and thinking, ‘Wait a minute, why? If I’m going to pay so much money in rent, I can get the same amount and be able to purchase a house and I’m just going to be able to go ahead and buy a house and also get the tax write-off’.”