Rents are free-falling in the country’s most expensive market.
The median monthly rate for a studio in San Francisco in September was $2,285 per month, Bloomberg reported, citing data from Realtor.com. That’s 31 percent lower than it was a year prior. In comparison, rents fell about 0.5 percent nationally.
Median rents for one-bedroom units were down about a quarter year-over-year, while two-bedrooms dropped in price by 21 percent, according to Realtor.com.
Santa Clara and San Mateo, both in the Bay Area, also saw big drops in their median studio rents — 19 and 18 percent, respectively.
San Francisco’s rent drops are among the largest in the country since the coronavirus pandemic began. Its vacancy rate has risen, too; it was at 6.2 percent as of May.
Even though that trend hasn’t borne out nationally, it has in the country’s other ultra-expensive rental market: In Manhattan, studio rents have fallen by 15 percent to $2,495 per month, and the vacancy rate recently hit a historic high of 5 percent.
The precipitous drop in rents in some markets can be directly attributed to the pandemic, which has led more employees to work remotely. “Renters are likely heading to more affordable areas where they can get more space at a cheaper price,” said Realtor.com chief economist Danielle Hale.
Some companies have taken notice. San Francisco-based Stripe is among the firms that want to cut salaries of employees who move out of cities like San Francisco, Seattle and New York, and offer a one-time bonus instead. Facebook and Twitter are reportedly considering similar moves.
[Bloomberg News] — Dennis Lynch