The coronavirus pandemic had a swift and negative effect on market rent in major metros throughout 2020, but prices are slowly returning to pre-pandemic levels. Apartment List’s recent National Index (https://www.apartmentlist.com/research/national-rent-data) reports a 0.1% increase in rent prices from December to January.Momentum is shifting across the country, but data shows that the Bay Area won’t be along for the ride.
Yardi Matrix reports that since January 2020, year-over-year multifamily rent growth has dropped 13% in San Jose and 27% in San Francisco. Seattle, New York and Boston are the only other metros to see a similar drop nationwide, but anticipate rent increases by year’s end. The Bay Area is the ONLY market that projects continued rent declines. The most pessimistic report claims San Jose could to see a drop through December 2021, while San Francisco’s decreases last through 2022.
Not all hope is lost. San Francisco appears to be at the bottom of the city’s price correction. In January, rents in San Francisco fell by just 0.4 percent month-over-month compared to an average monthly decline of 3.4 percent from April to December 2020. Although San Francisco rents have yet to increase since the start of the pandemic, the leveling off indicates that the city’s market may soon turn the corner.
Concessions are through the roof as landlords try to reduce vacancies. Landlords are offering months of free rent and other amenities for new and continuing tenants. These discounts average $3,500 in San Jose and $3,600 in San Francisco per apartment.
Remote work continues to be the norm for tech workers and surrounding areas are reaping the benefits. In Sacramento, effective asking rents are up over 8% annually. Zumper reports that East Bay communities like Concord, Dublin, and Livermore continue to see an influx of renters seeking cheaper living and more space. Their rental rates were some of the most stable in 2020.