Costly exodus from cities leads to massive rent cuts in New York and San Francisco

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Some of the largest cities in the country are facing an overabundance of apartment stocks, which is driving prices down.

San Francisco saw prices fall the most in September, according to data from Realtor.com, with costs for a one-bedroom unit dropping 24.2%.

Two other cities in California – San Mateo and Santa Clara – saw the second and third largest drop in average bedroom rental prices, followed by Suffolk, Massachusetts and Manhattan.

The median rent for a one-bedroom apartment in Manhattan fell 15.4% year-over-year in September.

SAN FRANCISCO TAX REVENUES PLUNGE POINTS FOR RESIDENT EXODUS

“As tenants continue to adjust to the pandemic, many are looking for more affordable housing, employment opportunities and perhaps opting for less crowded neighborhoods,” the researchers wrote. “Urban centers such as the Bay Area, Manhattan, Boston, Seattle, and Washington, DC, all experienced the biggest rent drops compared to last year. These markets also represent some of the most expensive cities in the country, leaving rents the most wiggle room. ”

Overall, in America’s 100 largest cities, average room rents have fallen 1% year over year.

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San Francisco Chief Economist Ted Egan said the city saw a 43% drop in sales tax revenue between April and June, which he attributed to a flight of people from the city, instead than a drop in activity due to the pandemic.

While areas of California have seen a decline in sales tax revenue, other cities have seen an increase in online sales, but not San Francisco.

“In San Francisco, we’ve seen a big drop in physical sales and a very small increase in online sales,” Egan said. “So that begs the question, where did these expenses go?”

Some companies, like Twitter and Facebook, have made it possible for some employees to work from home all the time.

There has also been a well-documented flight from New York City throughout the pandemic, as Manhattan residents seek refuge in nearby suburbs or in different states.

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