Despite offers of up to three months free rent, cash incentives to sign a new lease and advertised rents having already dropped over 20 percent on a year-over-year basis, the weighted average asking rent for an apartment in San Francisco continues to tumble and has just dropped to under $3,300 a month.

As such, the weighted average asking rent for an average apartment in the city, which measures 2.4 bedrooms when counting a studio as having one, is now 20 percent ($825 a month) cheaper than just eight months ago, down 23 percent on a year-over-year basis and down nearly 27 percent from a 2015-era peak, with the average asking rent for a one-bedroom in the city having just inched under $2,800 a month (which is down from around $3,700 at peak).

At the same time, listing activity for available units has jumped nearly 10 percent over the past couple of weeks and there’s another wave of vacancies poised to further roil the market as well.

Our latest trends analysis is based on pricing data from over 13,000 past and active listings, which is a subset of the data from over 100,000 listings going back to 2004 that we maintain, normalize, and index on a monthly basis.

We’ll keep you posted and plugged-in.

76 thoughts on “Rents Continue to Tumble in San Francisco”
  1. So SUPPLY and DEMAND is what actually sets rents, not the ignorant and slanderous accusations of … GREED tossed around by myopic fools.

        1. The power is the 40 other people, looking to rent the same apartment you want. Now they are leaving the city and are all fighting over Tahoe and Palm Springs and guess what? Prices are going up both places fast. Supply and demand is not rocket science, but with so much ignorance, it seems like it.

    1. Not really, you don’t have to raise the rent because of high demand or less supply. ‘Oh why don’t you raise it as high as you can get’ That is greed. Not saying it’s right or wrong.

      1. Subsidized housing is GREED … forcing others to pay for your rare (hundreds apply for every single unit and 99% get nothing) and selfish luxury “affordable” (just for you alone) housing.

          1. It’s costing almost 1 million dollars a unit, for subsidized housing on South Van Ness. Thats not a net, it’s an overflowing pot of gold.

      2. As a landlord I always charge the maximum amount that the market will bear. Charging less than market rate could saddle me with a tenant for life and ever decreasing rent when compared to inflation.

        If that tenant turns out to be a problem I have zero recourse so I’d rather have them move on in a few years as most of my market rate tenants do.

        Thanks rent control.

        1. I always charge less than market. I have an “acceptable” rate of return and I’m okay with it. Of the 20 units, I get like 1 turnover a year. This is usually because they have outgrown the space. Maybe it’s pure luck but no tenant issues thus far. I been doing this for 10 years or so now.

          Different ways to do business that’s for sure.

          1. I have multiple rentals in San Francisco, East Bay, Marin, San Diego and Hawaii. I charge close to market but slightly under. It keeps tenants happier and they stay longer, so less hassle and time with no rent between tenants. None of my SF properties are rent controlled and I would never allow it to happen. I’d sell out and move the money elsewhere with a 1030 tax deferred exchange.

    2. Landlords set rents. They are not forced to be exploitative. All of the people forced out of their homes are more than likely enjoying the current comeuppance.

      1. No one can force you out of your home. But they can end the rental to you of THEIR home. And sure, the working class are just going to loving the recession and no jobs. But hey being a street vagrant is the biggest growth segment of the population in SF ! So at least there is that to look forward to.

        1. “Street vagrants” and “the working class” are not new to San Francisco nor is subsidized housing because as annoying as it may be to some, this is community of mostly empathetic people. And still this city has managed to become one of the most successful and desirable cities in the United States. It is the exploitation of a temporary situation that ultimately leads to a collapse and recalibration.

          1. “WAS” is the key point here. If you have not noticed, people are bailing and Walgreens just closed their 8th store because of rampant theft. The “progressive” utopia is unsustainable and crumbling. Just like all communist utopias crumbled. Took 80 years but they all crumbled. 13 Billion dollars pays for a lot of window dressed vagrant services, but it can’t fill a single pothole……

  2. All of these articles always refer to apartments. What is happening with single family homes? Presumably rental houses, particularly mid-block houses in neighborhoods with long lots (ie, large backyard), have not dropped as much…?

    1. …yes the SFH are immune to the fact that people are leaving SF, leaving CA, and have no desire to live with the [people] running the city and state. London Breed is an absolute disaster who is in over her head. She must have serious imposter syndrome. It’s fantastic watching the implosion after leaving, SF deserves everything coming its way.

      1. so confused why dropping rents for incredibly overpriced housing is a bad thing. I think London is doing fantastic. People leaving the city – is a great thing.

          1. A city full of human waste, used drug needles, filthy shopping carts and empty store fronts can never be “great”. A great tragedy maybe…

        1. good for the people, good for the city, bad for the real estate economy, bad for the politicians who want to tax more people, not less.

    2. Unfortunately, we index by the number of bedrooms and not specifically multi-family versus single-family homes.

      That being said, asking rents for rentals with at least four bedrooms have dropped more than those with three or less and we’ve seen an anecdotal uptick in the availability of single-family homes, along with a sharp drop in the average list price per room, as it’s more difficult to find roommates and maintain a full house to effectively prorate the rent.

    3. Single-family next to me with a deck, yard and garage in Cole Valley has been sitting empty for 3 months. Master tenant had been there for over 10 years.

  3. California is the most cyclical place imaginable. I remember the big rent jump in the 70’s. Nice big apartments and even whole houses were running $2000/mo in today’s dollars. So the city enacted crazy sauce ever more stringent controls et voila, rents are now double that and more. “Master tenant” dbgs who “keep a room” but really run co-housing, rich Marinites who keep rent controlled pied a terres (though most of those are now short term rentals)… AIDS and the quake and the dotcom crash and the 2008 crash all caused major drops and it always came back – because rent control maintains an artificial de beers diamond cartel pricing scheme that will always just keep getting worse. Its the rental market equivalent of the Soviet grocery aisles – a tomato costs nothing but good luck finding one.

    1. Your stories about master tenant/co-housing and short-term rental schemes are violations of rent control protections. A landlord who is paying attention to their building could void the lease.

      Also, take a look at Craigslist this morning. There are tons of rentals available in rent-controlled buildings within neighborhoods of “real SF”.

      1. It is extraordinarily difficult, if not impossible to evict a master tenant. The best a landlord can do in this situation is to become an information source for rent control laws and inform the sub tenants that they are overpaying for their rent and that they can sue their master tenant for the rent overages.

        1. It’s extremely easy to evict one if you write the lease agreement properly, but a lot of landlords/property managers don’t do that.

          1. A lot of these tenants are on leases written in the 80s and 90s. San Francisco courts have also decided that it’s subtenants who are harmed by master tenants violating these laws (if at all), and it’s extremely hard for a landlord to recover possession on these grounds. I’d be curious to hear of any cases at all.

  4. I am so glad that I finally rented out my 2/2 for $4100, $400 above what the previous tenant was paying (who lived there for 8 years). And yes, it is pretty brutal out there if you have vacancy. But South Bay is no better. Places such as Palo Alto and Mountain View are seeing 20% drop as well.

    But cycles like this come and go every how many years. Personally, I am ready to take advantage of the current market condition. Aggressively looking to buy, and glad that buyers finally have a choice. Back in 2018, I put in an offer and the listing agent told me that she “got 9 offers, and 8 are higher” So I actually appreciate having this current market condition.

    1. I still don’t get it.

      If things were cash flow negative before, with rents dropping so much now cash flow has gone even more negative. Prices would need to drop a huge amount, first to drop enough to make things cash flow at pre-COVID rents and now to chase rents down their post-COVID plunge, just to make things cash flow positive. And it looks like rents are poised to drop even more.

      And if prices are sagging, you can’t count on equity gains so why are you putting up with negative cash flow?

      1. RE decisions are not just for today. They will impact you the next 2 years out, 5 years out, 10 years out…You got the point.

        So if you believe rent will stay at today’s level, then you don’t buy today. If you believe rent will go up in the next 2-5-10 years, then you want to buy at today’s reduced price, and lock that in. Later on when rents go back up, you sit to benefit.

        Make sense?

        1. It just seems that rents react faster than prices. Rents are leading the way down so buying before prices catch up to the drops (catch down?) doesn’t seem great. You get the twin disadvantages of dropping cash flow and dropping equity.

          Now if prices drop far enough that the cash flow looks good, that’s different. Or if we hit a price bottom and the level of negative cash flow is offset by a chance of strong equity appreciation, that’s different too.

  5. The rental situation will be turned upside down over the next few years if SF experiences a significant population drop. IMO SF will lose 120K plus residents. This will not only impact existing rentals, it will obviate the need for much of the 65K units in the housing pipeline.

      1. No. I’ve been consistent in saying that IMO SF will see a 10% – 15% population drop. It seems to have started. One sign – online sales during the pandemic increased by only 1% in SF. Significantly less than the other state counties. Population estimates are released every year so we will know soon enough if a large drop in residents is occuring.

          1. More or less on the pre-Great Recession and pre-tech boom numbers. SF’s population was around 758K in 2007.

            I believe there will be a significant exodus of tech jobs from SF (it is happening already) as well as a significant drop in retail/service industry jobs as small business retrenches.

            Actually a 10% – 15% drop would not be that shocking as there was a similar change (only growth) in population after 2007 and up thru 2018.

        1. Despite your conviction that San Francisco is done, it is one of a small number of coastal cities in the U.S. (the entire world?) that everyone wants to come to. The long-term megatrend is people moving to cities and the cities continuing to get bigger. Five years from now, I am expecting that we will know how to deal with pandemics well enough that people will be able to satisfy their preference for living in cities…San Francisco, included.

      2. AA is right. Dave, I will bet you literally (LITERALLY!) any amount of money that your prediction will prove to be hilariously wrong.

    1. Losing 120k would only knock the population back to 2007, which was around the peak of the previous SF housing bubble. I doubt anyone would look objectively at 2007 San Francisco and say that this is fine, no need for more housing.

        1. And, too, some units in the pipeline were projected to be for the 45K or so new jobs envisioned in the Central SOMA Plan. That plan is likely never going to come about so the Hub becomes pointless as it was supposed to be for workers in the Central SOMA and specifically meant to correct the missive jobs/housing imbalance that is in the Central SOMA Plan.

        2. True, but that pace of expansion — 0.8% annual growth 2010-2019 — is still not that high. It averaged twice that rate in the 1950s, when the population was larger!

          1. Regardless, with an average of 2,650 units a year having been delivered over the past decade, which was up from 2,250 units a year the decade before and versus less than 1,000 units a year, on average, in the 90s, that would still be 35,000 additional units of housing to serve the same population at the time.

        3. Then rents will go down and more people will come back. It is a pretty nice city after all. If you really want rents to go down a lot, make the city undesirable. Nuclear waste for example. Zombies. You get the picture.

          1. SF already has plenty of zombies and nuclear waste. You know what bring people back? Jobs, not lower rents.

  6. This is the cycle of cities, though SF is more dramatic due to the pay rates of top earners (versus those of most other cities) and the lack of housing, since we’re ostensibly living on an island.

    In the last 20 years this has happened 3-4 times, with dot com bubble, the uptick during the previous 15 years, with the recession in between, along now with the recent 5-10 years of increases. Just another day.

    Re the “greed” aspect, it really depends on the landlord and their primary objective. I rent a single property and its definitely my goal to bring in income, BUT, I choose not to push the rent prices up as much as I could since it would push out people who actually need housing, versus those who have enough funds to rent anything they want. When rent pricing becomes a tool based purely on the desire to make an extra 100, 200, 1000, dollars per month, then a landlord becomes as human as a computer. And as much as I like computers, I think there are other elements of life that are a bit more precious than another 200 bucks in my pocket.

  7. The exodus is remarkable. No one knows what will happen next year or beyond. But I do think it’s not correct to talk about this like other cycles. Tech decentralization away from SF and the Bay area has at least partially decoupled from the economic cycle. It’s a jump to say that vaccines will bring herd immunity and a big rebound but then an even bigger jump to say that all of those jobs will return. The way of working is changing and that started pre-pandemic.

    1. I agree. This was a macro-trend that started prior to Covid. The shift of tech jobs out of SF and the Bay Area was already underway. SV will remain the center of tech but its preeminence with decline, relatively, as other metros “gain share”. Tech hubs will continue to emerge on the West Coast and in other parts of the country. Covid accelerated the process. Per Jennifer Stojkovic, SF lost more than 30K tech jobs after the dot com bust. That number will surely be larger this time around.

      The ripple effects are huge. Each tech worker generates about 650K annually for the local economy. Think of the restaurants and other retail service outlets at the base of the DropBox building or that of Stripe. DropBox has already put more than a third of The Exchange up for sublease and is expected to give up additional space. 1600 highly paid workers now can permanently telework. The market for five dollar avocado toast and very pricey lattes will drop off sharply in much of the SOMA. Not to mention all the retail jobs in SOMA dependent on tech.

      1. This is a pretty fanciful idea of the reality of the 1800 block of Owens Street. It’s bereft of retail of any kind. No avocado toast anywhere in sight. You’d probably have to walk all the way to Dogpatch to find it.

        By the way Dropbox also had significant Seattle leases that they probably aren’t in acute need of at the moment.

      2. Notoriously, tech workers don’t leave the building for lunch. Their employers feed them. In certain neighborhoods heavy with tech employment, lunch restaurants have been having a tough time. This might change some if the tech companies shut-down their kitchens.

        1. Good point, DH. Coding companies contribute even less to their communities than people are beginning to realize. Walking down almost any block in SF with a heavy coding presence would confirm this, even before covid.

          1. According to SF’s Chief Economist, the average tech position contributes $650k to GDP (sum of spending by employer, employee, etc). We’re writing off that impact because we don’t see them buy lunch? Come on.

          1. It’s the old “money multiplier argument”: your lunch spending goes to the waiter > goes to his rent > rent goes to the landlord’s buying groceries > goes to the cashier’s getting his bike fixed ….etc.

            Is this all believable? Sure! when I was in grammar school my milk money was supporting half of Alameda County!

    2. I agree. Look at people leaving short term and what it did to rents. It isn’t as if 100% of people left SF and I don’t think even Dave would guess that 10% of the city has already left. But still, the impact on rents has been dramatic. Some, probably many, of the jobs will come back. But enough won’t that I think the next peak will be dramatically lower.

      I do think there will be a next peak, though a much lower one. But I think the main difference between this and the last two cycles is that this is still on going and the dotcom collapse and banking collapse were more like point in time events. You can’t really predict when the next peak will be when you don’t even know when things get under control. At this point I think it’s clear that this will be longer than the last 10 year (2008-2018) cycle, but how much longer is hard to know until things get under control. I also think its a big jump for people to take when they have confidant predictions about vaccines or herd immunity. Back in my day I’ve seen so many projects go over schedule and over budget working with established technology, that I find it very hard to believe that people can be certain of a schedule involving the interaction of a new disease and the human immune system. I trust the scientists, but decades of real world experience tells me that the best engineers aren’t really the best at scheduling or project management and I’m guessing its the same with scientists.

      Things will come back, but people are attracted to cities partly because of amenities and network effects. And when these are destroyed they take time to rebuild. The longer the period of destruction, the longer the period of rebuilding.

        1. Not sure if you’re being facetious but – “yes, plus”.

          So many things that make SF, or any city, desirable are shut down – live theater, great restaurants (largely), music venues small and large, other mass events such as City Arts & Lectures, big events such as Hardly Strictly or Off the Grid… Without those things there’s no reason to live in SF versus Sacramento or Fresno or Boise, except perhaps the weather. (Meaning no offense to those cities.) And in fact those cities have some things that SF doesn’t – an absence of poop on the sidewalks, needles in the streets, homeless accosting people every other block, etc.

          I’ve been back east the last 2 weeks and… it’s amazing. I’m actually enjoying life. No need to check air quality each morning, no incessant sirens, no aggressive homeless (and no “progressives” berating me for not giving even more to charities and local taxes…). It’s been quite eye-opening.

          1. I was being serious. I moved to SF when I was 27 and what kept me there well into my 40’s was the access to great music, sporting events, and the great dining. We moved 5 years ago out of the city. But I’d be lying if I said I didn’t miss the city. I do agree that without these things coupled with many WFH residents, there’s no value to being in the city.

          2. The SF street scene was bad and getting worse before Covid and is, if anything, still worse since. Walgreens just closed their 8th SF store (790 Van Ness) because of rampant crime. It takes a trip to another city to realize just how bad the situation is in SF – on the ground. SF residents who don’t leave the city too often sometimes don’t realize how dysfunctional SF is.

            Then there is the mismanaged City government. The Mayor’s salary is outrageous as is the fact that about 40% of City employees have a total compensation package of 150K or more. Despite a looming 1.5 billion dollar deficit the City is reaching into its emergency fund to give raises to city employees. Too many city workers are milking it. It takes the DPW 3 trucks and 6 plus workers to put bark on the Portola Avenue and Sloat Blvd median strips. The City could contract this work out to a landscape maintenance company and the work would be done with fewer workers at a lesser cost. The City government won’t reform itself in light of the current situation – instead it will raise taxes and make it harder for businesses to remain in the City – killing the proverbial golden goose.

          3. I echo this sentiment. Times 10. Life has been so much better outside of SF.

            No traffic, No homeless, No dung-pie dodging (human and animal), No bio-hazards to watch out for, No 2nd hand pot smoke, No malodorous stench of human/pet waste, No vehicle break-ins, No replacing tires because of irreparable damage unique to SF (yes, I’ve run into nails more than 2 times in a year), no unexplained front and rear bumper scratches.
            Lower insurance costs, Less hassle in general. Polite neighbors. Neighbors who actually help.
            Farm raised food. Butcher who listens and delivers what I want.
            Local cooks who know me on first name basis. And are open to new ideas.

            What do I miss?
            Dining Out
            Opera / Concerts

            But I am MORE THAN willing to give up what I miss for what I do not miss.

          4. Cave Dweller – What does “outside of SF” mean…as in where are you speaking about?

          5. @sockettome

            Somewhere south east of Utah along the border of Colorado. Admittedly I am going to suffer a harsh winters and hot summers. But I came to SF for a good livelihood (economics wise). The colorful lifestyle, interesting politics, quirky personalities are not to be found where I am. But I can count on people to help me or keep their word in general even if I disagree with them on specific issues.

            Oh yeah, I can go running, hiking, swimming, kayaking or biking for hours on end and not be bothered.

            Also, over many years, I found myself to be more comfortable around conservatives that I disagree with rather than liberals who appear to be in agreement with me. This may not work for everyone, but it works for me.

        2. Music is back..the Midway has been throwing shows for months 🙂

          But seriously..this is the most accurate assessment I’ve seen on here about recovery.

  8. It still has the highest rents in the country, so I think this ain’t as bad as it seems. The prices will stabilize at some point and go back up.

  9. Huh. Sounds like Northwest New Mexico. Did you look at any San Juan National forest areas of Colorado, up to Ridway, or surrounding? Those areas have a mix of conservatives and liberal folks. All of the gun owning variety so there’s a common sort of libertarian ground in

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