San Francisco has fallen behind New York City and Jersey City on the national ranking of median rent prices, according to a new report by Zumper.
San Francisco’s rent for a one-bedroom remained flat in May at $3,000, which was the same as the previous month and a 3.4 percent increase year-to-year. The Bay Area city goes against national trends, which shows rents growing in most markets, the report found.
Topping the list was New York City with a median rent for one bedroom at $3,780, a 6 percent increase month-to-month and up 5.3 percent year-to-year. Jersey City overtook San Francisco for the second spot with an average rent of $3,180, also an increase of 6 percent month-to-month and 29 percent since the same month a year earlier.
According to a different report by Zumper, renters are returning to the Bay Area, however they are consolidating around the South Bay where the large tech companies are headquartered. Rent prices in Mountain View, Cupertino and Santa Clara are growing while San Francisco’s is not.
“This shows that the return to office policies that the big tech companies have in place are really affecting the Bay Area rental market,” Crystal Chen from Zumper said. “These three cities house some of the biggest tech companies including Apple, Google and Intel, so the many employees returning to these areas to be close to the office are driving up demand and competition for rentals.”
While San Francisco shows stagnant numbers, the national rental market is experiencing an uptick in rents stemming from people’s hesitancy to purchase a home in the current market.
“A record number of Americans believe now is the worst time ever to buy a house — that sentiment is keeping demand for rentals high,” Anthemos Georgiades, Zumper CEO, said in a statement. “But many renters are putting off moves as they ride out uncertainty; at the same time, new multifamily developments continue to open. All these factors are helping create equilibrium across much of the rental market.”
In the Bay Area, other high-rent cities include San Jose, which ranked sixth in the nation with a median rent of $2,630 and Oakland in 11th with a rent of $2,200. The two cities represented a 1.2 percent and 0 percent change month-to-month, respectively, and a 6 percent and 7.3 percent change year-to-year, respectively.
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Rents should climb as the market enters its peak season.
“Renters typically start moving in the spring, with demand peaking during the summer and fall months, causing prices to climb, then dip slightly during the slower winter months,” the report said.