Having hit $3,500 at the end of May, the weighted average asking rent for an apartment in San Francisco has since ticked up another 2 percent to $3,575 a month, which is 11 percent higher than at the same time last year and 17 percent ($525) above last year’s nadir for rents.
That being said, the average asking rent for an apartment in San Francisco, which measures two and a half bedrooms when counting a studio as having one, is still 13 percent ($525) lower than prior to the pandemic and 20 percent ($950) below San Francisco’s 2015-era peak, with the average asking rent for a studio currently holding at around $2,100 a month, which is 18 percent lower than prior to the pandemic and nearly 30 percent below peak.
At the same time, the weighted average asking rent for an apartment in Oakland ticked up another percent over the past month to $2,500, which is 8 percent higher than at the same time last year and 9 percent ($215) above last year’s nadir, with the average asking rent for a studio hovering around $1,700, which is only 6 percent lower than prior to the pandemic but over 20 percent below peak. And as such, the average discount for renting in Oakland versus San Francisco, which had dropped from 35 percent prior to the pandemic to 25 percent early last year, has ticked back up to 30 percent.
Our analysis of the rental market in San Francisco and Oakland is now based on over 200,000 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
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As the radical supreme court continues with their goose-stepping, I predict west coast and east coast city population booms. Everybody [who matters] wants to be here.
Prices can rise but I don’t see how the population booms in the absence of construction, and the construction rate is currently very, very low and dropping. The only things that can happen in the short term are overcrowding and homelessness.
Maybe not “boom”, but certainly move towards the long term upward trend.
SF’s population was higher pre-COVID. Have the places those people lived been torn down?
Work from home has lowered the comfortable/tolerable number of residents per dwelling by some non-negligible amount. Back when tech employees were out of the house or apartment 10+ hours per day it was no problem to have 1 resident per bedroom. My experience is that even having two concurrent Zoom meetings in the same 2BR condo is very much at the limit of tolerability from the noise issue alone. A married couple where both spouses WFH on most days would really want a 2 BR at a minimum (assuming that one BR is large enough to function as an office). So this puts downward pressure on the number of residents in SF.
Conversely, there have been a lot more fun things happening in the city lately (Pride, concerts, etc.) and some people who commute into the city for these events will start pulling the trigger and moving back as FOMO counteracts the desire for fewer roommates and/or more personal space. I think the uptick in rents will accelerate in the near term.
Some places — probably mostly on the lower-priced end of the spectrum — have, but there are other ways to reduce supply of rental housing without full-on tear downs.
In case you haven’t been reading this site for very long, San Francisco has a surplus of flippers, AirBnB “hosts”, developers, and all manner of 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. One thing that those types of folks do a lot, and we can’t tell how often because the data isn’t available, are illegal dwelling unit mergers that marginally reduce the supply of housing but don’t show up in any official statistics like a legally approved demolition would.
” 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.”
You mean the SF workers, many of whom have also arrived here from elsewhere with Dollar signs in their eyes, have jacked up the price of housing and are looking to escape with their winnings/earnings/stock options/IPOs to early retirement?
The real estate market are far from the only players in the absurd Gold Rush 2.0 of current SF, unfortunately.
Yep, see that done all the time.
I’m in the trades and I’m done working for flippers. Hate what it’s been doing to the city.
My question was meant to point out the nonsense in the comment above it.
I see it was too subtle.
There’s no chance there are fewer dwelling units in San Francisco today than there were in early 2020. The population could rise back to where it was then, without *any* new housing being built, but of course that’s not the case, new housing has and is being built.
That point is made on this site all the time, by you each time.
If there are “surplus flippers” does that mean they aren’t flipping houses in which case is everyone are surplus flipper and therefore everyone is a “hanger-on in the real estate game”
Similarly we can’t measure your language because data isn’t available regarding not only dwelling units, mergers, arriviste schedules, their short term stints and departures, links between hotss and developers or not, successes or failures, or in fact, anything you wrote. In light of not being able to measure it we are left with our own opinions regarding your words. I for one say “baloney.”
you seem like a real credible judge of who matters lol. NYC,SF, and LA must be three of the most poorly run cities in the USA with 3rd world living conditions to match,
We’ll see how that progresses as we enter what could be the worst recession in decades.
The Sun Belt experienced a large in migration recently. Americans mostly care about weather, cost of living including housing, and strong law enforcement apparently. Not so much about the Supreme Court…
With gay marriage (Obergefell) and the ability to have a private sex life (Lawrence) seemingly next on the chopping block, this may change.
The Sun Belt has been experiencing a large in migration ever since the inventions of air conditioning and interstate highways. SF has always been an expensive place to live. San Franciscans have historically fled from more repressive parts of the US, and a resurgence of oppression may accelerate this. Of course in the last quarter century tech-related opportunities have been a big draw here. The attempt to lure California tech companies and workers to red states is less likely to be successful if people fear giving up their civil liberties.
Yes, all those people who supposedly happily fled to Texas, I wonder how they’re feeling about their decision as it turns into Gilead overnight.
There are very few if any oppressed rich people… the stream for SF has dried up unless housing and cost of living crash. And I’m sure hey can think of better places than SF these days …
Will the Tech Industry recent layoffs / hiring freezes and possible future earns downturn have any impact on the SF rental rates?
*When discussing Tech Industry there’s the difference in well-established likes of Alphabet, Meta and Apple and the startup I assume startup zombie companies. I assume investment money is starting to dry up whereas the big dogs (Alphabet, Meta & Google) will be fine
Any and all feedback is much appreciated!
Yes. Rental housing and owner housing demand is all driven by the need to have a place to live that is an acceptable balance of size, safety, convenience to work and non work life. The demand for home decreases if there is no income to pay for that home. The job and thus population growth of 2010-2016 ish brought the appreciation. Job loss will bring depreciation of housing. There is some stickiness though as you will have shifts from owner occupied to rental within a given area during recessions. Long term, look at Detroit vs San Jose over the last 40 years. Jobs…population…housing cost.
Alphabet is just the parent company of Google. As far as Meta, they are not fine. From two month’s back, Meta announces plans to slow hiring following challenging quarter:
Emphasis added. Most “mid- to senior-level” people will already own a place or be able to find a position where they can work remotely, but the people straight out of college or on their second job out of college will typically be the people most willing to pay S.F.’s absurd rents.
Our lease renewal offer included a month free (like in our first year) with only a $50/mo increase – was not expecting that
I’m currently in the market for a rental and have noticed a new (and surprising) trend: A large percentage of apartments/condos are currently listed slightly below market price fully furnished. These are not in the newer Soma buildings but north of Market in the more established neighborhoods.
Perhaps these are AirBnB’s that are empty but if you look on Craigslist, Zillow, Apartments.com, etc. you’ll see a lot of them.
Did some remodeling and raised rent from $6,700 to $8,000 for new tenants. Extremely pleased with the SF rental market.
There is an incoming flood of investors/business fleeing Europe.
If we clean up the city – we might just be able to catch some of them.
But I no longer have hope for San Francisco