After years of people bemoaning the state of San Francisco, a city stifled by skyrocketing rent prices and overrun by tech-worker drones decked out in matching Patagonia vests, new data suggests that change could be coming.
Zumper, the San Francisco–based apartment-rental site, just released its latest rent figures and, according to CEO Anthemos Georgiades, the “price drops are unprecedented” in the seven-plus years the company has published rent reports. “All this talk of people leaving S.F. for a future of remote work is now backed up by hard data.”
Georgiades isn’t being hyperbolic. Per Zumper’s report, one-bedroom rents in S.F. fell 9.2 percent year over year in May, the largest S.F. drop ever in the history of the company’s monthly reports and the lowest price point in over three years. The average price for a one-bedroom in S.F. stands at $3,360; it was at $3,700 the same time last year.
The plummeting numbers fell even further down in Silicon Valley.
In Mountain View, home to Google, the price for a one-bedroom home dropped 15.9 percent in consecutive years in May. Facebook’s home of Menlo Park saw a 14.1 percent tumble, while Cupertino and Palo Alto, home to Apple and Tesla, saw prices plunge 14.3 percent and 10.8 percent, respectively.
Georgiades says that these rent drops may be even higher than the company’s published data, “since some landlords conceal price drops in ‘lease specials’ like six weeks of free rent to move in.”
A cursory glance on Craigslist reveals major price cuts, with landlords all but begging you to sign a lease: “Newly Reduced Rate” reads the headline for a new East Cut studio offering eight free weeks, while this contemporary SoMa loft dangles ten weeks of rent-free living to interested takers.
“I’ve never seen anybody giving that much free rent as an incentive the whole time I’ve lived here, since 2003,” Bay Area property manager and landlord Carlos Carbajal tells KQED.
Several factors are at play: There’s a widespread hiring freeze; mass layoffs have hit the Bay Area’s tech industry; some have suggested Airbnb rentals now being listed as homes could be a cause (Note: an Airbnb spokesperson tells Curbed, “We have more listings and hosts on the platform today than we did on Jan. 1.”); and many tech giants in the Bay Area, like Facebook and Google, have told their remaining employees to work from home until the end of the year. San Francisco’s Twitter and Square went even further, telling most of their workforce they can work remotely permanently.
Not everyone is convinced that this much-needed rent-price slump has staying power. After all, these unprecedented figures are due to anomalous times brought on by a global pandemic.
I wouldn’t be so fast. I definitely see a lot of movement right now because it doesn’t make sense to be in a closed down city through the summer. But once things open up or the pandemic passes in 1-3 years, there will be a lot of good deals/prices, possible energy to come back.— Kim-Mai Cutler (@kimmaicutler) June 1, 2020
“I wouldn’t be so fast,” Kim-Mai Cutler, partner at Initialized Capital and vocal housing advocate, wrote on Twitter. “I definitely see a lot of movement right now because it doesn’t make sense to be in a closed down city through the summer. But once things open up or the pandemic passes in 1-3 years, there will be a lot of good deals/prices, possible energy to come back.”
While this price drop is refreshing to hear, it isn’t good news for everyone, especially in East Bay cities. The drops in rent, according to Zumper, were hardly noticeable in Berkeley, where it dipped less than one percent, and in Oakland rent prices for a one-bedroom went up 4.9 percent. According to the San Francisco Chronicle, “Georgiades speculated that the East Bay may become even more attractive post-coronavirus among Silicon Valley employees who want to stay in the Bay Area but don’t feel the need to live close to their corporate campuses.”
As for San Francisco returning to a city where trust-fund-free dwellers get by on a café job plus whatever cut they get from playing Bottom of the Hill? Don’t count on it. San Francisco still remains the most expensive market in the country, ahead of New York City, Boston, and San Jose, which all had negative year-over-year changes for their respective one-bedroom rents.
Correction: This piece has been updated for clarity.