Changes in remote work policies during the coronavirus pandemic are driving the downward trend in rents in expensive urban areas across the country, especially in tech-intensive rental markets like the Bay Area.
“What we’re seeing is really the shift from high costs, especially in urban downtown areas, to suburbs and affordability,” said George Ratiu, Senior Economist at Realtor.com. “A good number of companies, and San Francisco is the leader in this area, recognize the enormous burden, and technology companies were among the first to announce remote working policies extended to next year.”
Workers were able to move out of high-cost rentals near their workplaces in San Francisco and Silicon Valley, and in areas where rent is more affordable, or in larger properties in quieter neighborhoods and with equipment such as a home office or a home gym, Ratiu told me.
Median studio rental prices in San Francisco are down 31% year-over-year to $ 2,285 in September, according to Realtor.com. The median price fell 24.2% to $ 2,873 for one-bedroom apartments and 21.3% to $ 3,931 for two-bedroom apartments. Apartment List and Zumper recently published similar results in their September rental reports.
Close behind San Francisco were the counties of San Mateo and Santa Clara, both in the top four for all three categories of rent cuts. Santa Clara recorded the third-largest nationwide drop in studio rental prices, down 19.2%, and San Mateo, fourth, down 17.6%. Alameda also made the list, coming in 10th with a 12.1% drop in studio rental prices.
For one-bedroom apartments, San Mateo was second on the list of steepest drops, with rents down 12.5%. Santa Clara came in third with a 12% drop. San Mateo and Santa Clara fell 11.1% and 9.2%, respectively, in the median two-bedroom rent.
By nationwide comparison, Realtor.com found that in the 100 largest US counties, the median studio rent was $ 1,347, down 0.5% year-over-year; the median for a room was $ 1,502, up 1%; and the median rent for a two-bedroom unit was $ 1,873, up 2.3%.
Ratiu said it was not surprising to see the strong migration to affordability in San Francisco and Silicon Valley, where before the pandemic many people were willing to pay a premium to live near their homes. workplace. He said that at least next year, he expects the easing of the San Francisco rental market to continue, especially as employers see the positive side of remote working.“We’ve seen a lot more companies… starting to realize that remote working has now turned out to be a very viable business proposition,” he said. “Companies also recognize that it is difficult for many employees to make ends meet… so they take advantage of geographic dispersion and set up offices in areas at lower cost.”
Ratiu said he believes many companies will take a hybrid approach, where office workers will spend some of their time in the office and some remotely.
For its rental report, Realtor.com examines units, including apartment communities and private rentals, such as condos, townhouses, and single-family homes. National rents are calculated from the average median rental prices for the 100 largest US counties, excluding studios, which are based on 80 of the counties with 20 or more listings.
Realtor.com is operated by Move Inc., a subsidiary of News Corp., under license from the National Association of Realtors.
Kellie Hwang is a writer for the San Francisco Chronicle. Email: [email protected] Twitter: @KellieHwang