CFAH

The weighted average asking rent for an apartment in San Francisco ticked up another 2 percent in May to $3,500 a month. As such, the average asking rent in the city is now 12 percent higher than at the same time last year and 15 percent ($460) above last year’s nadir for rents.

That being said, the average asking rent in San Francisco is still 15 percent ($600) lower than prior to the pandemic and 21 percent ($950) below San Francisco’s 2015-era peak, with the recovery for two-bedroom units, the average asking rent for which had dropped to around $3,500 early last year and has since ticked back up to around $4,000 a month, outpacing the recovery for both larger and smaller units but still 10 percent below pre-pandemic levels and 20 percent below peak.

At the same time, the number of apartments listed for rent in the city, which peaked in the fourth quarter of 2020 and has since been ticking down, is now 10 percent lower than pre-pandemic levels but with 16,500 fewer people in the labor force and 15,700 fewer people employed, none of which should catch any plugged-in readers by surprise.

Our analysis of the San Francisco market is based on over 150,000 data points going back to 2004 that we maintain, normalize and index on a monthly basis. We’ll keep you posted and plugged-in.

Comments from Plugged-In Readers

  1. Posted by Matt C

    “At the same time, the number of apartments listed for rent in the city, which peaked in the fourth quarter of 2020 and has since been ticking down, is now 10 percent lower than pre-pandemic levels but with 16,500 fewer people in the labor force and 15,700 fewer people employed, none of which should catch any plugged-in readers by surprise.”

    I do not understand your comment- I am surprised

    Less people in labor force and lower employment should lead to lower demand for apartments yet lower offers of apartments (listings) is a sign of just the opposite. There is a inconsistency of the data presented that calls for additional analysis.

    • Posted by SocketSite

      As also presented above, “the average asking rent in San Francisco is still 15 percent ($600) lower than prior to the pandemic and 21 percent ($950) below San Francisco’s 2015-era peak,” which should offer a hint.

      • Posted by 123

        Actually, you failed to assess for how many available units were currently on the market so your analysis is incomplete.

      • Posted by Matt C

        I still don’t understand what you are trying to say

  2. Posted by Chris

    I think people underestimate the desire of millennials to not own a home and not deal with the stress of ownership and to be able to live in a walkable city center. Once pandemic is 100% over and things open up fully, it will draw these people back. It won’t be the employers that bring them back but the ability to live and work remotely,

    • Posted by OMN

      What isn’t 100% open today, other than perhaps offices?

      • Posted by SFRealist

        “Once pandemic is 100% over and things open up fully”

        Pandemic is not 100% over. Not by a long shot.

      • Posted by Neighborhood Activist

        Half the retail spaces are empty (not literally half, but there is at least double the vacant commercial space compared to early 2020, and it was already pretty bad then.) Most restaurants now close obscenely early, 8 or 9 pm when it used to be 9:30 or 10. In SF of 2019, 8 pm was prime dinner hour, now restaurants are starting to clean up and close at that time.

        I’d guess that there are 25% fewer restaurants than existed pre-pandemic, but that’s just a guess.

        It’s not anywhere close to being the same place it was… but hopefully we’ll keep making progress in that direction.

        • Posted by DK

          The number of restaurants actually grew slightly between 2019 and 2021.

          • Posted by Daniel

            I don’t see the number of restaurants as a good read of the health of the industry. I wonder how many restaurateurs had to go into crushing dept just to stay open*. Business is still slow, cost moving up, there must be a lot of ppl out there who arebarely hanging on by a thread.

          • Posted by Notcom

            Thanks for including the link to the chart(s), but frankly, they don’t make any sense: how is it possible that the number of restaurants grew from 3,153 to 3,974 over that four-year period when each year the ratio of closures to openings was about 2:1?? There’s something fishy about these numbers (and I don’t mean an herb-encrusted mahi-mahi)

      • Posted by Looking Up

        US Immigration for one.

    • Posted by Greg

      Dude, everything is open. These people are not coming back. They moved to Tahoe and other places, and they’re working remotely. There’s no reason why people have to live in San Francisco in order to work for a tech company.

    • Posted by Daniel

      In that sense, SF now competes with other places around the world. Walkable city, remote work etc. You accurately describe what draws younger folks/families and retirees away from CA and out to e.g. Portugal. Which has half the cost of living and stress levels as compared to CA/Bay Area/SF.

      • Posted by Brahma (incensed renter)

        For other socketsite commenters wondering where the above comment came from, there was a story in the Los Angeles Times earlier this month, Californians are packing up and moving to Portugal with a video on their website, that attempted to describe why the number of U.S. citizens living in that country of 10 million rose 45% last year, even as the overall population in Portugal has declined.

        • Posted by jimbo

          portugal is not a bad choice. weve been looking around the US a bit over the past year, and there is really not very many walkable areas in the whole freaking country. thats why young people come back. Im middle aged and cant give that part up

    • Posted by California Dreamin’

      Stop speaking for millennials. We are going into our 40s now. We want to own homes. This housing market makes it near impossible. The lower home ownership among my generation isn’t due to us not wanting to own any equity while spending thousands of dollars a month in shelter, it’s because it is a lot tougher for us to own a home than previous generations, especially the boomers who had everything handed to them on a silver platter, and then pushed over the dinner table when others started to show up for the meal.

      • Posted by Brahma (incensed renter)

        Of course, if you’re a landlord renting to millennials who for whatever reason don’t own a home and want to be able to live in a walkable city center, S.F. is a great place to do it. From four years ago, Millennials in SF will pay nearly $400,000 to landlords in their lifetimes, new study finds:

        San Franciscan residents born between 1980 and 1994 can expect to spend a total of $399,400 on rent during their lifetimes. The figure comes from a study released Wednesday by HotPads, a rental search platform owned and operated by Zillow. The report draws on information from the U.S. Census Bureau, the Bureau of Labor Statistics and HotPads rental data. Millennials will pay nearly double that of their parents’ generation. Baby Boomers…paid $233,000 in total rent, the study found.

        If you haven’t already, go read the whole thing. It goes on later to say that of the three cities where the gap between Generation Z and Millennial’s total lifetime rent is widest, two of them are in the Bay Area, where median rent is more than double the national median.

    • Posted by Brahma (incensed renter)

      There’s really no need to debate whether or not the pandemic is truly over or if things are opened up fully. Greg is correct, those people have moved out. From May 27, San Francisco has one of the largest population dips in the US, new census data shows

      Now, new data from the U.S. Census Bureau shows the population of San Francisco did indeed decline significantly between July 2020 and July 2021. San Francisco saw a 6.3% decrease in population during this time, the largest percentage decline of any major metropolitan area across the country. It was also a much greater dip than other Bay Area cities. Daly City saw a decline of 3.2% and San Mateo fell by 3%.

      Emphasis mine. And of course there are other cities with walkable centers that are much, much less expensive to live in than S.F.’s.

      Now what the people who have long-term ties and commitment to San Francisco need is for this information to get out to all the flippers, AirBnB “hosts”, two-bit mom and pop landlords and all the other hangers-on in the real estate “game” who have arrived here from elsewhere with dollar signs in their eyes, ready to exploit S.F. workers by jacking up the pricing of housing so they can escape with their “winnings” to early retirement in Texas or Florida, so they can pursue their dreams of avarice in Austin or Miami. Maybe then prices will return to a more affordable level. But I won’t hold my breath waiting for that to happen.

      • Posted by SocketSite

        Keep in mind that the number of people employed in San Francisco has increased by 63,000 since July of 2020 and over 33,000 since July of 2021 alone; the labor force, which is highly correlated with population, is back to within 96 percent of its pre-pandemic count, having increased by 15,900 since July of last year; and the “new data from the U.S. Census Bureau” is already outdated, as we noted back in March.

      • Posted by sparky-b

        did the mom and pop landlords really arrive from elsewhere for that endeavor? Are they really part of your hangers on list, and are you promoting they be replaced with big corporate landlords who aren’t hangers on as a way costs will come down?

        • Posted by The Milkshake of Despair

          Just speaking for myself. I know many mom and pop landlords and none of them are carpet baggers looking to rake in profits and then move back home. All of them have primary day jobs that drew them to the Bay Area. Their landlord role is a part-time activity. That said I do know of a few who retired and moved to a lower cost area, but only one back to their hometown (he’s still working in tech remotely). The Sierra foothills are loaded with Bay Area retirees.

      • Posted by soccermom

        On redfin I counted six 2/1 Below Market Rate Condos for sale for less than $500k.

    • Posted by Mao

      “I think people underestimate the desire of millennials to not own a home”

      If by “desire,” you mean “ability” to own a home, then sure

  3. Posted by Ricardo Ragazzone

    THE RENT IS TOO DAMM HIGH

  4. Posted by Anonymous

    For what? The amount of rent cost is not worth it anymore. SF used to be worth it but not now…people should be paying us to live here for putting up with all this bs…

  5. Posted by Charlie

    I flog conods for a living–both sales and leasing.
    I’m having a tough time selling anything in less than showroom condition. Leasing is going gang busters though.

    • Posted by soccermom

      What’s a good value condo right now? Would love to understand this market better. It seems like at some point the <10 year old glass towers downtown will present good value if the market keeps heading for the suburbs.

      • Posted by Charlie

        Now is a really good time to purchase a starter condo. If you don’t mind living with dated interiors, there are some great deals out there. A lot of the “newer” glass towers are starting to show their age. Those were also the buildings that saw huge losses of equity during lockdown–especially those buildings with no common ameneities to speak of.

        • Posted by Kyle S.

          Case in point: when we were looking last year, several units at Opera Plaza and Daniel Burnham Court looked like good value if you were willing to live with (or invest in replacing) 80s fixtures and layouts.

          • Posted by Al

            I would disagree with Opera Plaza. This building is not only old but the HOA is outrageous. F THAT! I’d rather buy in a newer building with a lower HOA all day long. There is plenty of inventory coming online on Market – Van Ness that is reasonable!

          • Posted by soccermom

            What’s a good example of something you like on Market/VanNess Al?

  6. Posted by Al Velasco

    There are many new units hitting Market Van Ness that are condos where HOA’s are considerably less than Opera Plaza.

    Take the new buildings that were just constructed on the north west corner of Market and Van Ness.

    1 Franklin is another building with HOA that is much lower than 1 Franklin.

    • Posted by John

      The problem is the condo in SF isn’t appreciated much from history data ( I meant since 2000). In same price range the price appreciation cannot compare to its south neighbor in Silicon Valley.

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