Asking Rents in Oakland Slip, Discount to S.F. DropsAugust 17, 2020
With signs of weakness having started to emerge last month, the weighted average asking rent for an apartment in Oakland has slipped back under $2,600 a month and is now down around 10 percent since the end of last year, and 13 percent below a 2016-era peak of roughly $3,000 a month, with the average asking rent for a one-bedroom back down to around $2,200 a month.
At the same time, asking rents in San Francisco have dropped even more on a percentage basis.
And as such, the discount for renting a one-bedroom in Oakland versus San Francisco, which had averaged around 38 percent from 2015 through the end of last year, has dropped back under 30 percent, driven by an accelerated decline in San Francisco versus an uptick in Oakland.
Comments from Plugged-In Readers
By mere coincidence, I saw all these listings in SOMA on Zillow….
Boy, let me list a few for your entertainment:
33 Tehama – 82 for rent
399 Fremont – 94
Modera Rincon – 120
Avalon at Mission Bay – 58
Solaire – 65
Bayside Village – 52
Jasper – 53
While larger buildings tend to have more vacancies, at least in the absolute, keep in mind that the vast majority of units currently listed for rent on Zillow aren’t located in SoMa. And of course, declining rents in one area have a ripple effect on the rest. Which brings us back to the rental market in Oakland, both in the absolute and relative to San Francisco…
The free rent isn’t cutting it. Eventually they will need to cut the rents down 20-30% and throw in parking, even that may not generate interest. As we get further along and companies continue to push out opening offices more people will decide not to renew existing leases and there will be a continuing mass exodus out of these dense urban centers. October/ November we’ll start to see rents plummet. I’d love to live in a SOMA condo, but just not at $4-6K for a 2 bdrm
Yeah, this has hit the MSM too: “A new report confirms what many have been talking about for weeks: There is an exodus out of San Francisco, and the numbers are staggering.”
You can’t even be in denial about this anymore it’s so obvious.
Moving on the 31st to Palm Springs after 9 years of renting a 1 bedroom loft on 6th Street. I’m happy to trade in nearly $4000 / month rent for a $2000/ month mortgage. Not to mention the space the pool and the privacy. Our landlord is undeterred at re-listing at what we had been paying. If he would have taken our proposal for $3000 a month (what we paid when we moved in June 2011) we would have probably stayed.
If you are willing to pay more for your milk and gas today than 2011, why do you think your landlord should accept the same rent?
I mean, the word “lord” is there for a reason. The nerve of them asking the lord of the land for lower rent! What’s wrong with these renters that they think prices that increase massively in bubbles should moderate in depressions?
Great Welcome to Palm Springs. Although we will give you a warm welcome as the temps are up over 110 this week. My condo mate and I decided to come here independently in 2018 and 2019. He bought a condo and we have been really comfortable here. So glad to know more San Franciscans feel the same way.
Meanwhile in Sacratamato … 107 degree heat which, if COVID didn’t prohibit, would provide a “balmy” backdrop to all the fun things you can do when you move there. Like head over to West Sac for a MINOR league Giants game. Or maybe chow down on a meatloaf sandwich at ‘Suspects Dinner Theater’ in Old Town. I suppose locational alternatives exist with urban amenities, but the problems everyone is pining about won’t be any different in those markets. Bottom line – this may take longer and may have some unforgiving consequences than grand recessions in the past, but SF’s eulogy seems a bit premature, if not absurd.
This is affecting the condo market in big way too. Owner’s may not have previously sold because they could hold off and rent their units out for a princely sum. Not anymore.
Given this vast amount of vacancies, at some point, some investors will choose to liquidate. I would love to buy on foreclosure again. I did some back in 2012, and boy, $350K purchases now at $900K. I am going to sit tight until end of 2021.
Sounds like a good plan. I am also looking to buy here in San Diego. Currently renting month to month, so I have complete freedom right now and for once the renters/ buyers will soon have the power. Rents in San Diego have just started dropping first time since the 2008 recession (when a house could be bought for $150,000 that is now worth $800,000)
When I bought this one property for $350K on foreclosure, the owner bought it 7 years prior at $570K only to lose it to foreclosure 7 years later. So patience pays off, and discipline pays off.
I am hoping by end of 2021, we are either at the bottom of this round, or at least close to the bottom.
for the large apartment buildings (owned one by corporate landlord and run by staff in a leasing office), is it expected for the list price to be ‘take it or leave it’ or do people usually negotiate? i’m looking to rent something am learning the ropes.
They usually don’t negotiate because it leaves them exposed to claims of discrimination (if they offer a lower price to one applicant but don’t offer the same deal to another…). Despite saying that, I’ve had some success negotiating move in dates, length of a lease, pet fees, small stuff like that and especially in smaller family owned buildings.
You might not be able to negotiate the rent but you can the “concessions” like requesting two months free rent with a 12 month lease.
thanks for tips and insight Asdf and AJ.
I am curious if rent control can actually benefit the landlord on the way down as it would lend some stickiness to their revenue base relative to non rent controlled so basically a tradeoff between amount of revenue and the stability of said revenue.. How about a breakdown of asking rents pre and post 1979?
Every unit in my building that was rented post-2010 has turned over or is vacant. Everyone that rented before then has stayed. Sample size of one building with six units but still.
Oakland is a lagging – not leading – indicator. It will ‘catch up’ to SF, but 6 months later.
I’d bet a lot more people in Oakland are not paying rent than in SF. Once the eviction moratoriums are over rents will drop.
I think the pandemic is changing the product demand vs overall housing demand. You’d pay a serious premium to live in SF for pretty much social reasons… bars, entertainment and cultural venues. Without those things being easy to enjoy or are simply shuttered, you might as well enjoy a rent reduction where the climate is more moderate!
what’s the nations’ rich people playground going to do when all the rich people go somewhere else? maybe the Bay Area should have invested in a more balanced economy?
The Bay Area economy is based on finance, healthcare, tourism, and technology. What do you propose “investing” in to “balance” out that mix?
Yes, this is the strongest mix you could possibly have. If we were in auto-manufacturing, oil & gas, commodities, there would be even more dire consequences.
Eventually the pandemic will end and everything will return to normal.
Well said, Hancock!
UPDATE: Asking Rents in Oakland Drop, Listings Jump
Comments are closed.