San Francisco Experiencing Biggest Plunge in Apartment Rental Prices in U.S. Amid Covid-19
The decline in rent is most likely attributed to renters moving out of cramped areas and into the suburbs while working at home amid the pandemic
San Francisco has seen a massive drop in apartment rental prices in the country as the nation continues to battle the coronavirus pandemic, a new report shows.
The September rent report from listing site Realtor.com found that the year-over-year prices for studios, one-bedrooms and two-bedrooms in San Francisco have plummeted, most likely due to renter's preferences amid the pandemic. The city has long been viewed as having some of the U.S.'s most astounding real estate prices.
Median rent prices for studios in the Bay Area dropped 31 percent year-over-year to $2,285, according to the report. One-bedroom prices fell 24.2 percent to $2,873, while two-bedrooms declined 21.3 percent to $3,931.
According to a San Francisco Chronicle analysis of the report, the drop in rent can be attributed to the change in remote work policies due to COVID-19.
"What we’re seeing is really the move away from high cost, particularly in urban downtowns, toward the suburbs and toward affordability,” Realtor.com senior economist George Ratiu told the outlet.
“A good number of companies, and San Francisco is the leader in this, recognize the tremendous burdens, and tech companies were some of the first to announce extended remote work policies into next year," he added.
Ratiu added that before the pandemic, many people were willing to pay more in rent if it meant living close to their place of work.
Now, with most offices being remote, Ratiu said he expects the San Francisco rental market to continue to see a drop in pricing.
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Many other big cities across the country are seeing similar trends.
According to Bloomberg, studio rents in Manhattan fell 15 percent to 2,495.
Likewise, in Seattle, prices for a studio dropped 12 percent to $1,490.
"Renters are likely heading to more-affordable areas where they can get more space at a cheaper price," Danielle Hale, a chief economist at Realtor.com said in a statement.
"The future of rents in many of these cities will depend on whether companies require employees to work from the office or continue to allow remote work."