A recent article by Louis Hansen of the San Jose Mercury News details the lasting effects of the COVID-19 pandemic on the Bay Area housing market, and how they’ve caused local rent prices to nosedive.
Housing demand in the area is hitting historic lows, and the urban areas can no longer rely on the influx of tech-employees to fill vacant units.
Apartment List’s Fall Rent Report shows that no Bay Area submarket has escaped the virus’s impact. Monthly rent has dipped 6.3% in Fremont, 7.9% in Oakland, 9.5% in San Jose, and a staggering 17.8% in San Francisco.
A multitude of factors have contributed to these trends. Hansen states, “Remote work has reduced the need for apartments near tech and professional offices, and increased demand for more home space for video conferencing and the ever-elusive balance between job and home. The recession has hit hard on service workers and others unable to work from home, causing some to leave the Bay Area to move back with family or cheaper spaces.” Sacramento and Salinas are benefiting from the scramble, with median rent prices in these cities steadily rising since March of this year.
Despite this, Bay Area rents remain high. The median price for an apartment $2,590 in San Francisco, $2,170 in San Jose and $2,090 in Oakland. Landlords in these cities are attempting to soften the blow by giving virtual tours, offering rental reductions, and even agreeing to stretches of rent-free months to lower their vacancy rates as quickly as possible.
How the market will adjust when the pandemic lightens up is unknown. The Bay Area housing market has historically been a safe haven for investors, but the increasing remote work flexibility appears here to stay. Will the Bay Area residents continue to bargain hunt elsewhere, or will the culture and community that office and urban life create cause people to storm back?