San Francisco’s rental price decline picked up again in November, with data showing that it’s still a renter’s market in much of the Bay Area.
Decreases in San Francisco, still the most expensive rental market in the nation, are now looking a bit more like normal seasonal trends than the pandemic free-fall from the spring and summer, according to analysts from listing services Apartment List and Zumper.
But the pandemic is helping magnify those trends as an increase in vacancies has put downward pressure on prices. And analysts say a rebound in the market is unlikely during the winter months.
The spring remains a big unknown, with major factors including reopening, job trends and the anticipated rollout of coronavirus vaccines.
San Francisco
In November, the month-over-month decline in San Francisco rent was 3.4% with an average price of $2,054 for a one-bedroom apartment, and $2,377 for a two-bedroom unit, according to the December San Francisco rent report from listings site Apartment List.
The site uses U.S. Census and Department of Housing and Urban Development statistics to include older units and lower income neighborhoods in its analysis.
“This month’s numbers come as less of a surprise than previous months,” said Rob Warnock, research associate for Apartment List. “There is seasonality in the rental market. Prices typically rise during the summer and cool in the winter, so historically rents are dropping during this time of year.”
Warnock said a seasonal dip usually occurs around the holidays and lasts until early spring, when people start moving again. In November for the past three years, rental prices have dropped, but this year’s effect has been amplified by the pandemic.
“I think it’s safe to expect rents will stay cool for the coming few months,” he said. “When springtime rolls around, the market may start rebounding if it begins to attract renters back into the region.”
That will depend on several factors, Warnock said, including the strength of the local job market, whether offices are reopened, and the development and distribution of coronavirus vaccines.
Another major listings website, Zumper, analyzes rental data from more than 1 million active listings across the country and includes new construction, and excludes listings that are currently occupied or no longer available. Its December national rent report shows a month-over-month rental price decrease of 3.6% in San Francisco, compared to last month when it showed the lowest monthly decrease since April at 1.1%. The average one-bedroom cost $2,700, with the price of a two-bedroom at $3,570.
“Rent decreases in San Francisco picked up again last month after slowing down the month prior,” said Zumper analyst Neil Gerstein. “The decrease in pickup last month could indicate that the rental price fallout in the Bay Area is not over yet, and will likely persist into 2021, especially with migration out of the Bay Area trending upward.”
San Francisco still remains the most expensive market in the country but has seen the largest declines in rents year over year. Apartment List reports a 25.5% year over year decline in November compared to the same time last year, and a decrease of 24.5% since March. Zumper calculated a year over year drop of 22.6%.
National
Zumper’s national comparison of the largest cities shows New York as the second most expensive for renters, with a price decline of 3.1% in November and an average one-bedroom rent of $2,470. Boston was third, with a price decrease of 2.7% and an average rent of $2,150. San Jose was fourth, down 1.4% at $2,090, and Oakland in fifth, declining 1% month over month with a median rent of $2,000.
Apartment List’s national analysis found the biggest rent declines during the pandemic concentrated in large, expensive cities, particularly on the coasts. Seattle and Boston surged ahead of New York in month over month rental decreases. Prices dropped 5.6% in Seattle with a median two-bedroom rent of $1,739, and fell 5.2% in Boston for an average rent of $1,729. Phoenix saw the highest rental increase of 3.9% for a median two-bedroom rent of $1,150.
Bay Area
Across the Bay Area, the second largest rent decline in cities examined by Apartment List was in Oakland, down 3.3% in November for a median one-bedroom price of $1,660 and two-bedroom for $1,970. Redwood City declined 2.4% and San Mateo went down 2.2%. Zumper found significant rent drops in Menlo Park, San Mateo and Mountain View, all down 5.1% each for a one-bedroom.
The biggest month over month rental growth increase was in Livermore at 4.9%, followed by Milpitas with rent increasing 4.8% and Vallejo in third at 4.3%, according to Zumper.
Hayward was the only Bay Area city examined by Apartment List that saw an increase, at just 0.1%, with a median one-bedroom rental price of $1,950 and two-bedroom average of $2,180.
“Looking at the entire Bay Area metro, price growth again was negative on average,” Gerstein said. “Median 1-bedroom prices in Bay Area cities decreased 1.7% at a monthly rate on average last month. In year-over-year terms, median 1-bedroom prices were down 10.9% on average.”
Kellie Hwang is a San Francisco Chronicle staff writer. Email: kellie.hwang@sfchronicle.com Twitter: @KellieHwang
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December 02, 2020 at 05:57AM
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