The weighted average asking rent for an apartment in San Francisco has now dropped to $3,825 a month. While that’s not exactly cheap, it’s nearly 7 percent ($275) cheaper than four months ago, 10 percent ($450) cheaper than at the same time last year and 14 percent ($625) cheaper than a 2015-era peak of around $4,450 per month. And the average asking rent for a one-bedroom in the city is back under $3,300 a month.

At the same time, offers of complimentary rent are on the rise, driving effective rents down even more.

And having jumped in April and then ticked up in May, the number of apartments listed for rent in San Francisco jumped again this month and there are now nearly twice as many apartments being advertised for rent in the city than at the same time last year.

Comments from Plugged-In Readers

  1. Posted by Sierrajeff

    What’s the index used for these rent numbers? (Enquiring tenants considering contacting their landlords want to know… 🙂

    • Posted by SocketSite

      Our latest analysis was based on pricing data from over 3,700 past and active apartment listings which we normalize and index on a monthly basis (and for which the “weighted average” apartment now totals 2.4 bedrooms when counting a studio as having one).

      • Posted by Sierrajeff

        Thanks – but is that, e.g., pulling listings from Zumper (which seem to have more institutional landlords), Craigslist (the opposite), or some other collection methodology / site(s)?

        No criticism intended at all, just curious about the underlying source(s).

        • Posted by SocketSite

          Our database of listing data, which goes back to 2004, has excluded Craigslist postings (which tend to be too duplicative and onerous to verify in order to accurately trend) in favor of industry sources since 2015.

          • Posted by heycarlos

            What exactly are the industry sources? Can’t see a good reason not to be transparent about this.

          • Posted by rentsdue

            heycarlos – You gotta be in the industry to get access. There are plenty of reports, data, and information that come directly from owners and the info is available if you pay for it. Remember we are in the age of information and quality info isn’t free.

          • Posted by wilson

            What really matters here is actual rents paid net of concessions/incentives. That’s the quality data. Just like for sales, actual rents get bid up in a hot market and drop below asking in a colder one.

            And a 6 week concession on rent is really just a 11% drop in rent for this year. Some landlords prefer concessions because it makes the market seem stronger than it really is and they hope it wont lead existing tenants to ask for reductions. Also it sets the expectations for the next year higher. But the reality is that next years rental market will be whatever it will be. Asking rents and incentives are just marketing.

          • Posted by SocketSite

            Some landlords prefer concessions because it makes the market seem stronger than it really is and they hope it wont lead existing tenants to ask for reductions. Also it sets the expectations for the next year higher.

            That’s a bingo! (And that’s precisely why the downward trend in asking rents is more meaningful than some might realize.)

        • Posted by jessgreb01

          Great questions, I’m interested in understanding the data sources as well (also no criticism, just interested). I live in the East Cut in SF and I’ve been tracking rental vacancies in some of the larger luxury apartment buildings down here. I’ve recently seen a spike in vacancies from between 7% up to 22% vacant. For example, 399 Fremont currently seems to have 22% vacancy. They don’t seem to have lowered prices yet, but they are offering 1 month free. Its very interesting to see the trends. It will be interesting to see the full impact of covid and remote work when its all said and done.

          • Posted by michael

            Stop calling it East Cut. That idiotic name needs to die. Plus, it makes it obvious that you just moved there 20 min. ago.

          • Posted by Jimbo

            Is East cut in San Francisco?

          • Posted by Brahma (incensed renter)

            Jimbo: yes, according to Google Maps it is. Long-time residents disagree, however, hence the scorn and derision coming from folks like michael.

  2. Posted by MLNerd

    Do you have median values? Wouldn’t SF rents be skewed by the relatively less frequent but very expensive rents? (ie Bill Gates problem) Median rents should be more representative of the population.

    • Posted by W. Leake Little

      In a sense we’re lucky that SF has such a large preponderance of rented vs. owned properties against which the data are arguably more representative than any attempt to ‘normalize’ the magnitude of the variances. The trend is more important than the need to ‘predict’ rents by neighborhood, property, etc. I would recommend looking at whether the trend downward is accelerating or not…

  3. Posted by taco

    AirBnB

  4. Posted by EHP

    expect more when the $600 unemployment stimulus expires

  5. Posted by reanto39

    It’s worth noting that free rent incentives are only available at non-rent controlled properties. A RC tenant receiving such an incentive would be able to get their base rent reduced by the rent board, using the first year’s total rent / 12 calculation.

    • Posted by KM

      I’ve seen a couple of offers through Zillow in apartments that are rent controlled

    • Posted by Pablito

      And yet we still have the least affordable housing in the country. People who were working 2 jobs and doubled up in studios for years will now be sorta able to afford to eat decent food?
      At least the trend is finally in the right direction. 🙂

    • Posted by Jones

      Well RentSFNow/Veritas is sure making offers on Hotpads. Most of their properties are offering six weeks of ‘Move In Allowance.’ I think they’re calling it that instead of ‘free rent’ to get around having to factor the rent paid across 12 months as establishing a base rent in a rent-controlled building.

      • Posted by tipster

        It might fool the tenants, but it won’t fool the rent board should any of the tenants wake up and take them to the rent board when the rent isn’t dropped the following year. The rent board doesn’t care what it’s called, they only look at what was paid during the first year of the tenancy and divide it by 12.

        • Posted by Jones

          Agree with you. The question is whether the tenants will figure it out. I lived here for a few years before I understood how the rent ordinance works.

          • Posted by Lucas

            And will it even matter? Will the people, jobs & rents be back up to normal next year? Don’t think the people & jobs are coming back anytime soon. Don’t think the rents will either.

          • Posted by Ohlone Californio

            Jobs, rents and people can’t come back anytime soon? Why not? An antibody treatment will arrive before long, likely followed by various vaccines. And why is “normal” even needed? SF has been running at above normal for years now. What is normal?

          • Posted by Brahma (incensed renter)

            Jobs, rents and people can’t come back anytime soon? Why not? An antibody treatment will arrive before long, likely followed by various vaccines.

            How about because ‘Superforecasters’ Say a Covid-19 Vaccine Is Still a Ways Off:

            People who get paid to make forecasts say there’s only a 9% chance that there will be a widely available vaccine for Covid-19 before next April…the forecasters…sift through news reports, scientific data, and whatever else they can get their hands on to make their best guesses…and have backgrounds in a variety of fields, including, according to the company’s website, finance, statistics, political science, intelligence analysis, science, engineering, and technology. Most of their forecasts are for private clients, but the vaccine question and some others are public because they were paid for by a charity, Open Philanthropy.

            I guess if one defines “before long” as “around a year”, or these forecasters are all way off, then sure, antibody treatment, followed by various vaccines will assure us that jobs & rents will be back up to normal before long.

            I don’t think the folks whose livelihoods depend on in-person service jobs, and the landlords who rent to them, can hold out for a year. We’ll all find out if I am wrong later this summer when the extended unemployment benefits end.

          • Posted by Ohlone Californio

            I’m not sure why you responded to my “antibody before long” take with a literal reading along the lines of a vaccine expectancy take.

  6. Posted by eddy

    not really fair to compare this market to any other market. so so many variables. buy the dip 😉

  7. Posted by Jason Calacanis

    This is going to drop a lot more, as the CEOs/founders I work with are all telling me that they are giving up their leases in San Francisco or downsizing them in the 50%+ range.

    Many folks were looking for an excuse and now they have it.

    Also, if you don’t offer remote work you will be at a disadvantage vs. other employers… so I suspect work from home is going to be here for some time to come–or permanently.

    I do think the homes south, east and north of the city will do fine… as folks just want to get away from the crime, homeless and cost issues in the city.

    • Posted by Dave

      Agreed. And, as tele-work continues for an extended period, will companies change the “home” location of their tele-workers out of SF to avoid the payroll tax. Twitter’s tax break has ended and they are rumored to be leaving the City. Already they had sublet space in their building that they no longer planned to expand into – that was before Covid.

    • Posted by heynonnynonny

      The FAANG companies fight really hard to stay centralized, cramming people in as tightly as possible. Despite expensive real estate and large investments in low-latency videoconferencing, the preferred model is still one large office every eight timezones. The timeline for a vaccine looks a lot better than the timeline for seamless telepresence.

      If I were an ambitious founder right now I would have an outdoor workplace to allow F2F conversations between the people who mattered. How many startups are going to be wrecked by telecommunications misunderstandings in remote teams I wonder.

      • Posted by AY

        “How many startups are going to be wrecked by telecommunications misunderstandings in remote teams I wonder.”

        I’d guess the exact same number that would be wrecked by the same misunderstandings if the teams were communicating F2F.

  8. Posted by Dale c eaton

    The city has been over priced for 10 years on average apartments, especially as the homeless crowd got bigger under Newsom and the litter got worst, it became the fittest city on the west coast

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