Rents are falling and vacancy is rising in San Francisco as the coronavirus pandemic continues to take a toll on the Bay Area’s tech economy.
Rents are down 9.2 percent year-over-year, according to RealPage. That doesn’t mean apartments are now cheap, but the drop brings rents to their lowest since at least 2015 — the median rent on a one-bedroom apartment was $3,360 in May, a roughly $300 decline year-over-year.
Vacancy hit 6.2 percent in May up from 3.9 percent in March when residents were ordered to stay home to mitigate the spread of coronavirus.
Rents didn’t fall as much in Los Angeles, but they’re still down from a year ago — one-bedroom median rent was about 3 percent lower than it was in May 2019.
The majority of renters in L.A. are still paying their rent as well. May rent checks were down just six percent from pre-pandemic levels.
The coronavirus pandemic wreaked havoc on California’s job market, which could impact the rental and housing markets in the mid- to long-term. Nearly 151,000 people were laid off in May.
A pronounced shift toward remote working could impact San Francisco’s rental market especially hard. Major Bay Area tech companies including Facebook and Twitter have announced their employees can work from home indefinitely, although it remains to be seen whether or not they’ll follow through with that.
With geographic constraints no longer limiting renters and buyers to the expensive markets near their companies’ offices, some could spread out to cheaper markets. [WSJ] — Dennis Lynch