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San Francisco, Silicon Valley rents plunge amid downturn
- Snowman66 6y agoI was thinking about moving to The Villages in San Jose and purchasing a condo there. I know that this blog is about rentals, but would someone like to comment about if I should purchase now or wait and see if there is a price decline. Thank you in advance.
- Snowman66 6y agoIs the purchase price of a home or condo in San Francisco or the San Jose area being effected by the rent downturn? Thank you for any comments about that question.
- Splendor 6y ago> The 9.2% drop in the average one-bedroom San Francisco rent of $3,360 still leaves it unaffordable for the vast majority of city residents. Yeah, that's not much of a drop.
- akhilcacharya 6y agoFor a 1-bed that's actually $500-700 cheaper than it is in my area (Kendall Sq. in Cambridge).
- teachrdan 6y agoBut you're comparing the rent in a small part of one city to the average rent for an entire city. One could cherry pick the rent in a comparably small neighborhood in San Francisco (the Mission, the Marina) and find it even higher than in Kendall Square.
- sokoloff 6y ago1-beds in Kendall are $4000/mo?! That’s absolutely insane.
- jurassic 6y ago$4000/mo for a 1-bed in Cambridge seems high to me, but I guess I am not surprised. Kendall is mostly new developments that I would describe as "premium mediocre"; nice, but not nearly as nice as you would expect for the money. It's also very close to a lot of offices so rich workers pay a hefty premium for that convenience. I'm paying $3200/mo for a 2-bed in Central Square (1 subway stop away, still in Cambridge) in a much older building. Moving here from the Bay Area in 2018 made that feel like a good deal, but even I'm looking for a bigger place further out right now.
- ambicapter 6y agoThat's absurd, I'm in running distance from Kendall and my rent is <$1k.
- akhilcacharya 6y ago....how?
- ambicapter 6y agoRoommates, I guess? Also, for clarity, Kendall is 1.7 mi away from me.
- randyrand 6y agoIts not unheard of to spend 50% of your post-tax income on rent in SF, so its like a ~8% pretax raise. pretty damn nice IMO!
- ccktlmazeltov 6y agoThat's the average, I'm seeing 30-50% drop just by glancing on craigslist.
- bradlys 6y agoYou’re seeing something I’m not then. I’ve kept my eyes on the peninsula market for years and there is no 30-50% drop. Most single family homes I’m looking at are experiencing no drops at all. Condos and apartments - nothing too out of the ordinary either.
- ccktlmazeltov 6y agoAfter 5 seconds looking, this used to be 4000$ AT LEAST https://sfbay.craigslist.org/sfc/apa/d/san-francisco-bright-east-facing-1-1/7134299141.html https://sfbay.craigslist.org/sfc/apa/d/san-francisco-bright-...
- bradlys 6y ago> This posting has been flagged for removal. [?] I'm presuming you're looking at spam listings and getting taken for a ride.
- ccktlmazeltov 6y agoNot sure, but I found a bunch of places like this. Haven't tried to visit any. They don't look like spam to me FWIW.
- tibiahurried 6y agogiven how much they climbed in the last few years, rent (buy) still way too expensive. But it is a start. We are moving away from SF anyway. Not worth it.
- jumbopapa 6y agoInteresting news. I've heard that real estate prices haven't budged much and with the stock market remaining relatively strong, I wonder if we will see a corresponding rebound in rent sometime soon.
- vmception 6y agoThe demand drivers of students and tech workers is gone, and the street conditions are abysmal. The volume of anyone else obsessed with 'networking' is much lower.
- inieves 6y agowell said
- nostrademons 6y agoI think real estate will follow later. I've seen price cuts of $100-200K on the units that actually sell. Real estate is sticky - many people hold the line on price hoping that a buyer will come along later - and the economic crisis is just beginning to hit the sector of society that's a potential home-buyer in the Bay Area. There's also a fair bit of pent-up demand that sees this as a bargain-hunting opportunity and will still rush in - price won't drop significantly until those buyers have all bought or changed their minds. Real estate here bottomed in 2010 after the 08-09 recession. It took about 2 years to make its way from profits to stock prices to layoffs to home prices.
- deleted 6y ago[deleted]
- 6gvONxR4sf7o 6y agoI think real estate hasn't really moved because supply and demand moved together. Fewer people moving around means fewer sellers and fewer buyers. Hell, prices could even go up if the number of sellers shrinks by more than the number of buyers shrinks.
- Simulacra 6y ago"Rents for a one-bedroom apartment dropped most in the cities richest in high-paying tech jobs, falling 9.4% in San Francisco compared with May of 2019. In Mountain View, home to Google, rents fell 15.9% year over year, while in Apple’s hometown of Cupertino rents dipped 14.3%, according to the rental search engine Zumper. In San Bruno, where YouTube has its offices, rents tumbled 14.9%."
- gretch 6y agoThis really doesn’t match my personal experience at all. I live in Mountain View (work at G) and pay 2k for a 1 bedroom (non luxury). Lived here 3 years and pretty happy with it but I checked Craigslist and padmapper last week for some of these supposed 15% rent discounts and found rent to be pretty much the same as pre pandemic. This is anecdata and I’m using human memory to compare rates per location/amenities but I think I would be noticing even 10% decreases... and I’m just
- CydeWeys 6y agoThe 15% drop is in actually signed renewals. The listings you're seeing are the ones that haven't yet caught up with the new market realities (rents seem to be somewhat sticky). These listings are aspirational, and aren't being signed at these levels.
- 0xffff2 6y agoSimilar here (except I get paid a lot less to work on the other side of Stevens Creek from the big G). $2k is pretty much the very bottom of the rental market here. I'd imagine that the top and median are going to fall first.
- Balgair 6y ago> 2k for a 1 bedroom (non luxury) I did this for a time in LA, but man, every time I see these rates, I'm just so glad I'm not there. I pay ~2k for a 3 story house, 5 bed, 3 bath, jacuzzi, 2 car garage, a smallish yard, and full HOA thingys like a big gym/YMCA center, shooting range, 18 hole golf course, batting cages, big pools, and camping areas. Denver area.
- buboard 6y agoTime to buy the dip
- arcturus17 6y agorent_price != property_price
- Finnucane 6y agoNo, but in a more or less normal market, they aren't completely disconnected. The rent-price ratio will not usually vary a whole lot (one of the markers of the Great Bubble was that the ratio was completely out of whack). Since units of housing are somewhat functionally the same whether you rent or buy, price changes in one part of the market will eventually catch up to the other.
- vmception 6y agoIts not the dip yet. Also these are rents, so you wouldn't be buying the property yet, wait till courts are even open for foreclosures and evictions as the moratoriums are still ongoing. My luxury building and a few others I checked have slashed rent 10-15%, while also offering 6-8 weeks free, which is two months. That means the real asking rate in these properties another 15% lower. Thats a total of 27% lower. You can try offering far less. I would ambitiously go for 60% lower than asking price and see what happens. Assume they're cash starved too.
- TheBlight 6y agoCan't read due to paywall but I wonder how much of this is due to most Airbnbs presumably going empty.
- Splendor 6y agoHere's the last sentence of the article: "In addition a lot of Airbnb listings are being offered as regular apartments now, which could also increase supply and lower rents, Goss said." "Goss" is Charley Goss of the San Francisco Apartment Association, FYI.
- bespokedevelopr 6y agohttps://outline.com/jaqTUG https://outline.com/jaqTUG
- DevX101 6y agoLooks like people are really leaving the Bay Area. you don't see 10-15% price drops in a year without corresponding drop in demand.
- Finnucane 6y agoAlso, a drop in money, as in, a lot of people suddenly don't have any. And not just people leaving, but people not moving in.
- driverdan 6y agoThe majority of people who lost income are not the ones buying real estate in the bay.
- cameronbrown 6y agoBut everyone buying real estate in the Bay Area needs a functioning economy to stay afloat themselves.
- throwaway1777 6y agoThe article is about rental prices, not purchase.
- nostrademons 6y agoYeah. I was driving through Mountain View & Palo Alto yesterday and basically every apartment complex has a "For lease!" sign on it, many with generous move-in specials. The steady stream of moving vans leaving the area hasn't abated, either - it's the end of month, and I've heard at least 3 of them being loaded up in my neighborhood in the last day. I suspect rents are going to fall further, too, because there are still a lot of vacancies. They're down maybe $200 on a $2000/mo 1BR, which is a lot in percentage terms but is still an awfully high rent when about 20% of units are vacant.
- shuckles 6y agoI guess they’re moving to Oakland, where rents were up 5% YoY.
- coldcode 6y agoAbout time. When I worked there in the mid-90's I thought it was double what it was worth. That would be dirt cheap today.
- jcomis 6y agoI think the reality will set in soon on this once the CARES bonus UI is removed (and if it is not replaced) and the PPP loans run out. Right now everyone I know in real estate is still convinced it was just a minor blip and love to cite cherry picked stats about how a recovery is already under way. Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs.
- xur17 6y ago> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs. I've been noticing this as well (I can still find some of them on Airbnb actually). I'm currently in the market for a house, but wondering if waiting a year might be a wise move..
- ar_lan 6y agoI'm waiting a year, in the hopes that some 700k-range homes start popping up that aren't 100% dumpster fires.
- jcomis 6y agoI'm in the same boat and have decided to wait. It's really impossible to know though. Luckily I'm ok with staying in my rental for the time being.
- onlyrealcuzzo 6y agoWell if you think this is going to be a downturn, you should look at how other downturns in housing unfolded. Usually, house prices take a while to fall once things get bad. Usually, you start to see a lot of deals and properties selling way under asking before average listing prices drop. If we are going to get to that point, it certainly doesn't appear to have happened yet.
- nostrademons 6y agoI'm starting to see this - of the 8 or so houses sold in Los Altos over the last month, one was 5% under asking and the other was 18% under asking. It's still pretty rare though. More interesting is the huge hit to the volume of sales. Mountain View was turning over about 8 houses/month before COVID, but for each of the last 2 months, only 4 houses have sold, and 5 in March. I think it'll be a while, and depend upon how the reopening goes, whether we get layoffs at major tech companies, and whether remote work becomes common.
- diebeforei485 6y agoMy landlord in SF offered to lower the rent around 9%.
- robbintt 6y agoA corporation or private?
- diebeforei485 6y agoPrivate (individual)
- ccktlmazeltov 6y agolike this? I want to ask them but I feel bad for asking... At the same time my place is grossly overpriced...
- autokad 6y agoso far it seems home prices are still high though. however, the data is kind of unnatural because many are not buying homes right now while many are not listing homes. I'm very interested to see how home prices in markets like seattle, nyc, and sf play out over the next year or so.
- proverbialbunny 6y agoHouse prices are down 8-10%. Rent is down 10-14%. ymmv depending on location.
- deleted 6y ago[deleted]
- ericmcer 6y agoThis also might open many landlords eyes to how ugly their situations can get when they want to remove a tenant in Oakland/SF/Berkeley even if a tenant stops paying rent. I have two friends who are currently refusing to leave in-law units and it is quickly getting bad for their landlords ($30k deal to get one of them to leave). That said I totally welcome this, part of the reason why our communities suck in the bay area is because everyone is renting. Owners have a vested interest in creating a nice place to live while landlords and renters have less reasons to care.
- fiter 6y agoYou can't even evict people right now due to the emergency regulations. I wonder why the landlords are even bothering right now? Wait until after, evict for non-payment (one of the only easy ways to evict), then either try to collect or send back rent to collections and claim it as a loss and move on.
- hedora 6y agoWe were once evicted from an in-law unit without cause. They wanted the space back for use as a home office. (I suspect that’s extremely common these days) In hindsight, we should have held out for a “make us move” offer. $10K’s is typical for that sort of situation in Berkeley. We’re too nice, and moved without a fight, in return the landlord came up with some BS reason to withhold our security deposit.
- fiter 6y agoBefore the bump in the move-out offer minimum, they could have done an Ellis Act eviction if they wanted to recover for their own use while paying you the minimum possible. (Actually, Ellis Act is one of the only eviction types allowed right now.) That said, it sounds like they wanted to have their cake and eat it too, so it's too bad you didn't feel like taking them to task.
- marcell 6y agoUmm... while they can't withhold your security deposit, squatting someone's in-law unit is obviously immoral. It's not your property, if they want it back, you have to move. Holding them hostage for $10k is scummy.
- cpascal 6y agoAnyone seeing a similar dip in the NYC metropolitan area? I've been casually watching rents and not seeing much of a dip. It seems that there are less units available as well, so perhaps that is counterbalancing a decrease in demand.
- misiti3780 6y agoI just asked the same thing below/above. I live in NYC but am currently outside the city and assume we must see a 15% decrease also.
- hendzen 6y agoStreeteasy data [0] shows a drop in listings but no fall in asking rents. However there has been a sharp rise in concessions - i.e. free month upon new lease signing. My guess is landlords are currently keeping apartments off the market rather lock in lower rents, and when they do need to move a unit they use concessions since they look better from an accounting basis. I think eventually we will see a fall in gross rents but it may take longer than expected. [0] - https://streeteasy.com/blog/data-dashboard https://streeteasy.com/blog/data-dashboard
- cpascal 6y agoNow that I think about it, you are right about there being more concessions. You are seeing a lot of "2-3 months free" listings now.
- sethhochberg 6y agoEven before the pandemic it felt like 50% of places on Streeteasy had been listed with net effective rents in recent years... the current situation is probably just accelerating a trend that was already well underway. Doesn't mean I'm not kicking myself for signing a 2-year lease on a place last fall, though. I love my apartment, I've been here 2 years already, and its a fair price, but I'm basically 8 months into a 24 month lease and could probably save almost 10k over the next 16 months if I had the option of breaking the lease and moving.
- RcouF1uZ4gsC 6y agoI expect in the near future, the urban rents in general will fall. Between COVID and rioting, living in a dense city just lost a lost of luster.
- safog 6y agoYou overestimate our cultural attention span :) Anyway, even with COVID + Rioting, I'd much rather live in a big city than in the countryside.
- inieves 6y agowhy?
- hylaride 6y agoAmenities. Not having to drive everywhere. Good internet. Rural areas are more conservative in general (I'm talking about the cultural sense, not economic) so that can be stifling for a lot of people.
- pathseeker 6y agoIt happened once before: https://en.wikipedia.org/wiki/White_flight https://en.wikipedia.org/wiki/White_flight
- mywittyname 6y agoThese people have figured out how to have their cake and eat it too. Major cities in the US have grown large enough that the ghettos can be reasonably far from the wealthier parts of town. That, plus racial profiling from both police and citizens, serves as an effective divide.
- Apocryphon 6y agoThere's a major spectrum of lifestyles between big city and countryside.
- 6y ago
- tanilama 6y agoAlthough I might benefit from this, but I have to point out that this is supposed to be the intern season, and there were always a surge in rent during this season in the past. That is not happening this year. So comparing to last year, you are seeing a larger drop, but it will left to be seen whether the scale of this drop is temporary or long-term. That said, the Bay Area landlords have benefited from the bloom for a decade, they are losing anything significantly, not yet.
- mistrial9 6y agoBay Area and indeed, California landlords have increased rent at every opportunity for more than thirty years; multiple studies show that rent in the 1970s was more like ten percent of a working income, that has changed to thirty percent+ across the entire State of California (on the other hand, San Francisco itself has always been pricey, at every stage for a hundred+ years). Isnt it somthing that the last thirty years is exactly when millions of US adults had turned thirty+. The cost structure of a young adult in the last thirty years has been nothing like the previous thirty. Building new housing (and rental units) has been substantially restricted across generations in California, but it got particularly noxious with the six-figure twenty somethings taking the rentals, while the other ninety-eight percent of the population just ate the cost increases at every turn. These are economic facts and are documented extensively at the Terner Center at UC Berkeley among other places.
- closeparen 6y agoKeep in mind this a thinly traded market, during the pandemic even more so. We're talking about dozens of transactions here.
- pmiller2 6y agoAt the same time, you have to also keep in mind that apartments in the Bay Area frequently get rented after a single, 15 minute open house, set at the convenience of the property owner or leasing agent. This does not seem to be happening right now, based on how my & my girlfriend’s apartment search has been going. We’ve also been seeing insane move-in incentives, like 2 months free rent, which I’ve never seen before. I’d love to see if there was more data about it, but my experience is leading me to believe the price drops are real (not statistical aberrations due to a small sample size), and likely caused by the immense negative demand shock we’ve been experiencing in the economy at large.
- reaperducer 6y agoWe're talking about dozens of transactions here. I think it's bigger than you think. I read a newspaper article just yesterday which stated that the average annual turnover rate for an apartment complex in the United States is almost 50%.
- refurb 6y agoYup, even when the market was "normal" (pre-COVID), it was usual to see random spikes and drops in the average rent price in SF. In a given month, if the latest rentals are all luxury apartments, that will spike the average rent price even if prices haven't moved at all.
- robbintt 6y agoThe SF market is extremely differentiated. The market is still tight in many verticals and not hugely changed for any landlord not already on the bleeding edge and pushing higher prices believing them to be reality. The towers are going to have huge vacancy rates since they practice this price “edge game” diligently.
- jedberg 6y agoThis article seems to be based on only a few transactions, as not a lot of people are actually moving right now. I manage a couple of properties in the Bay Area, so I keep a close eye on these things. What I'm seeing is not a drop in rents, but an increase in $0 deposits and many weeks of free rent upon move in (sometimes 6+ weeks). Landlords are very reluctant to lower rents, because with the statewide rent control that limits increases to 5% a year, we're incentivized to keep the rents high and give months of free rent, just so our base rate doesn't drop.
- notyourwork 6y ago> Landlords are very reluctant to lower rents, because with the statewide rent control that limits increases to 5% a year, we're incentivized to keep the rents high and give months of free rent, just so our base rate doesn't drop. How is it that Mission Bay apartments are not subject to these rent control regulations if this is state wide? Asking because when I lived in Mission Bay, UDR properties each year tried increasing my rent much higher than this.
- ejcx 6y agoMission Bay apartments were built after 1979 (or whatever the exact date is). It's all new construction, which isn't subject to rent control: https://www.sftu.org/rent-control/ https://www.sftu.org/rent-control/
- creddit 6y agoNot starting in 2019: https://la.curbed.com/2019/9/24/20868937/california-rent-control-law-bill-governor https://la.curbed.com/2019/9/24/20868937/california-rent-con...
- creddit 6y agoBuilding needs to be 15yrs old
- deleted 6y ago[deleted]
- misiti3780 6y agoI suspect this is happening in NYC too, but have not seen any data or articles on it.
- tkinom 6y agoThe employers and employees is getting use to work from home. It is just matter of time for certain percentages (20,30% or more) of folks decide to move out to Tracy, Sacramento, etc to just commute to work may once every 1,2 weeks or as needed.
- rconti 6y agoThere's an entire 1/8th complete housing development at Diablo Grande that looks like the result of a nuclear holocaust from last time someone thought people would commute 3 hours for the luxury of living absolutely nowhere.
- schnevets 6y agoAs a former NYer, I'm hearing stories from friends who got out when offices closed. Many relocated back to their parent's homes (mostly to suburbs in Indianapolis, Cleveland, or NJ) or to family vacation homes (in Maine, Poconos, or Florida). Selfishly, I hope these friends thrive in these new locales, whether that's through remote work or finding new opportunities. I hope they get out of their inflated NYC rents and bring new energy and ideas outside of the city. SF and NYC have had a chokehold on tech and other prosperous industries for way too long and this had ramifications nationally and in the cities themselves.
- fullshark 6y ago> Selfishly Not to pick on you cause I agree, but I feel like this is a problem with a lot of analysis of this phenomenon. A lot of people really really really hope this happens and the growth of megacities reverses. WFH/Remote job growth is the mechanism they are counting on because outside the cities there is so little economic dynamism, outside of a few firms in a few locations that are almost the only game in town. At the end of the day, when this is all over, companies are going to want to have their employees in the office, especially as tech jobs become more and more commoditized. My guess is in five years you're gonna have superstars that built insane resumes the past 15 years living wherever they want but the vast majority of tech jobs will remain in tech hubs.
- geodel 6y agoMaybe it plays out like this. However I think it would be other way round. People who do routine work which are basically human version of API calls may go remote. As their input / output is predictable and measurable they do not need to show up and hog 30-60 sq ft of real estate. In my experience of IT work for last 15 years if I exclude first few years where I needed some hand holding from senior folks, most work related discussions happen via conf calls and conclusions are shared via e-mail/chat. Conf calls are common because teams/clients are distributed across geographies. I also noticed a trend where folks in same campus but different building or even in same building but different floor demand a conf call be setup because they can't be bothered to show up for a face-to-face meeting in conf room.
- smattiso 6y agoHow long until Seattle drops?
- tinyhouse 6y agoI live in the greater Boston area and recently all suburbian homes I've seen sold for more than the asking price. I'm not following rentals so cannot tell. I don't think prices gonna drop any time soon. I hope I'm wrong. Boston has tech but smaller than SF. It's big on pharma, hospitals, and universities. Such industries cannot switch to fully remote so change here might not be as drastic as in other places.
- rconti 6y agoHouses are still selling for over asking in the Bay Area as well, although I did see an article saying 2019 prices were down 1.9% over 2018. Rentals are a different market.
- deleted 6y ago[deleted]
- ccktlmazeltov 6y agoI just checked and rents are down 30-50% in SF, but real estate hasn't moved (I would say it even went up)
- FreedomToCreate 6y agoMy community has dropped prices 10% and is offering 1 month free (4 year old complex in north san jose). However they are not offering this to current renters whose renewals are coming up. They offered me a 0% increase and when I cited that the 5 other identical apartments are currently available for essentially 20% off (10% discount over 12 months plus one month free), they began been pushing the narrative that the rent will increase by the end of June and that I should sign now before they change the offer. So now its a waiting game.
- nyc_pizzadev 6y agoSame is happening in NYC. Renewals are either no change or seeing an increase while move ins are seeing discounts. My advice is to move out. You will either get a nice discount somewhere else or force your current landlord to actually compete. When you straight renew you have very little negotiating leverage and landlords know this.
- jedberg 6y agoYou're actually in a pretty strong position. Normally to leave a lease you need to give notice, usually 30 days. But there is one time you don't have to do that -- when the lease ends. If you lease ends on July 1, you can turn in your keys on June 30 and walk away. Your landlord knows this. Rents won't go back up in July. Even if the economy recovers 100% in the next two weeks, most tech employers in the area are doing WFH until at least the fall if not next year or forever. If your lease ends on July 1, start looking for a new place now, but don't sign anything. As soon as you find something tell your current landlord that you are about to sign a new lease but you'd much rather not go through the hassle of moving. If they say yes, great, and if they say no, at least you have a new place lined up. Just make sure you take lots of pictures when you move out because your landlord sounds like the type that will nickel-and-dime you on your deposit.
- pb7 6y ago>Normally to leave a lease you need to give notice, usually 30 days. But there is one time you don't have to do that -- when the lease ends. Every lease I've ever signed required 30 days notice from either party to end the lease when the lease term ends, otherwise it proceeds on a month to month basis with no further action required. Edit: Technically not required in California but confirmed that it was in fact required for a previous state I lived in.
- paul7986 6y agoNever saw allure of living there..sky high rent, smells of a homeless epidemic like no other I've seen and overall the desire to live in any big city with COVID and riots/protests is even more unappealing! Hopefully all that and remote work pushes many to buy in more suburban and rural areas.
- conanbatt 6y agoJobs + weather. Put both of those in the median american value and the city would become a desert in a year.
- MAGZine 6y agoThe rental market is losing it legs in SF for sure, though landlords are going to try and prop up their values however they can. Like a sibling comment said, giving free months rather than actually adjusting the rate. The funny thing is, they price these free months into the rental rate so it looks cheaper than it is. Here's some anecdata from my little corner of SF. I know THREE separate homes trying to fill rooms, and it's going awfully. The rent is too high, and there aren't enough people looking for rooms. My old luxury apartment building has cut rents by around $500 for a two bedroom, about 10% (though I think they're doing it by way of free months). The luxury building down the street, Duboce, is also offering 2 bedrooms at about $500 off peak. They're also listing their rooms on craigslist. I rent a flat with two others in San Francisco. They're both leaving the city, and rather than find another apartment, I'm going to leave temporarily too. Funny, the landlord could have just given us a reduction and sign a new lease. Unfortunately, he'll now have to contest for a dwindling pool of applicants or let the place sit empty.
- Paul-ish 6y agoSo many believe remote work will cause rent to drop. But if we end up in a situation where you work from home only part of the week, that could actually spike demand for larger properties.
- dmode 6y agoWeirdly, I put my place up for rent in South Bay in April and got 10 applications in 5 days without any tours. So there is still underlying demand in the market
- jedberg 6y agoSame. Put up my place in Berkeley on April 28th, had it rented by May 1. Never rented it out that quickly before, and I had no showings.
- code4tee 6y agoSeems to be very localized ups and downs. In the core of cities prices are crashing and people are trying to get out. Meanwhile in surrounding suburbs prices are rising and people and getting into bidding wars. It seems that many want to stay in region but not right in the core of things, especially if their companies are shifting to WFH where daily commute is less of a deciding factor.
- onionoaks 6y agoRents IN SF other than downtown actually seem stable or marginally lower except for downtown and SOMA coz people are running away from downtown due to homelessness among other issues. Also colleges are closed so when colleges open in Aug/ Sept, many students will be back who left this year due to the COVID crisis raising the demand. This summer the demand is lower than ever due to COVID and homelessness.
- onionoaks 6y agoRents have dropped marginally everywhere than than downtown where rents have dropped drastically coz people are running away from SOMA and downtown. Rents elsewehere are stable as the demand has gone up from people who are abandoning downtown for more space and mobility and avoiding homelessness.
- 01100011 6y agoI'm curious how much this is driven by foreign students, specifically Chinese, staying home. On social media I've noticed the meme that China is peaceful and stable vs the USA which is currently still fighting the virus and plagued by massive unrest. I think the lack of interns, tech layoffs, and WFH may be a larger part of it, I'm just wondering if there is any data out there on how it breaks down by category.
- usaar333 6y agoI would think that international students from China is not only a minimal amount of the population, but also that very few have even left. (thanks to China's "five one" airline policy making it very difficult to go back to China)
- ccktlmazeltov 6y agofive one?
- usaar333 6y agoone flight per week per country per airline https://www.caixinglobal.com/2020-05-28/china-wont-ease-curbs-on-international-flights-as-fast-as-expected-101559869.html#:~:text=Dubbed%20the%20Five%2DOne%20policy,more%20than%20once%20a%20week https://www.caixinglobal.com/2020-05-28/china-wont-ease-curb.... It's extremely expensive to fly into China right now because of it.
- valleyjo 6y agoThis is happening a bit in Seattle too. I was able to negotiate a _decrease_ in rent after several years of 9% increases. 10% is the max allowed increase in Seattle if I understand the rules correctly.
- burlesona 6y agoMy office has announced WFH through the end of 2020, with permission to work from anywhere and no changes to compensation during that time. I would estimate 1/3 of people have moved out of the Bay Area as a result - many moving back home to stay with family or friends. Saving 6 months of Bay Area rent is a big deal. The folks who haven't moved out of the Bay Area have mostly moved to the distant exurbs, expecting (probably correctly) that even if we do "return to the office" in 2021 they'll likely be able to continue to WFH 2-3 days a week, thus the commute won't be as painful as it would otherwise be.
- twblalock 6y agoIf remote work becomes permanent for a lot of people and/or social distancing lasts a long time, I would expect a number of changes to happen: - Homes with more bedrooms will become significantly more attractive because people will want home offices (maybe one for each spouse!) - Homes with outdoor space will become more attractive - Quiet homes without noise from neighbors or the surrounding area will become more attractive - Proximity to public transit, freeways, and downtown areas will become less attractive as the drawbacks will exceed the benefits for most people All of this will tend to push buyers toward large suburban homes rather than apartments or condos. In the long term, I expect rents and sale prices for apartments and condos will drop for those reasons. House prices might even go up, relatively speaking, compared to prices for apartments and condos. What we are seeing right now is not that -- right now, what we are seeing is people unable to pay rent and landlords desperate for paying tenants.
- jedberg 6y agoI'm not sure remote work will drive much of that. Most families were already moving out of the cities into the suburbs. And young people want to be in the city for the social aspects and cultural aspects, and proximity to others. I think what we might see is an increase in demand for bigger units in the city as a young single person may want a two bedroom place, one for their home office and one for sleeping, but still want to be in the city to be near all the cultural and social amenities. And we'll also see increased demand for even bigger suburban homes as each spouse needs their own home office. So I think we'll see increased demand for larger homes in both the city and the suburbs.
- twblalock 6y agoI don't think very many of the social and cultural amenities of big cities will come back anytime soon. I think we are in for at least a year of social distancing and heavy restrictions on restaurants, bars, concert venues, sports arenas, etc. A lot of things that were previously considered amenities will now seem dangerous, such as public transit.
- 6y ago
- el_don_almighty 6y agoYou can work from home, but you can't career from home
- tharne 6y agoBetween Covid and the current protests/riots, I think we're going to see a major reversal of the urban renaissance that took place from roughly 1990 to the present. A formerly tacky suburban bungalow with a fenced in backyard starts looking pretty good in a quarantine compared to a one-bedroom apartment where the only way outside is via a germ-filled elevator. Watching downtowns like Chicago's burn is going to make a lot of business rethink locating to urban cores, especially when remote work is proving to be highly effective. Even if all of this passes quickly, the imagery and emotion will remain. Just like 3-mile Island effectively put an end to nuclear energy in the U.S. even though it was an isolated incident, memories of quarantines and burning police cars are going to do lasting damage to economic development in urban cores.
- redis_mlc 6y ago> the imagery and emotion will remain People have short memories. > Just like 3-mile Island effectively put an end to nuclear energy in the U.S. even though it was an isolated incident Construction cost killed nuclear.
- tharne 6y agoPeople are already moving out of places like NYC and SF, buying up houses in the surrounding burbs. It would be nice to believe that people will just forget this in a few months, but unfortunately that's just not going happen. You couple that with companies' newfound comfort with remote work, and you're looking at a long-term slump in investment in urban cores.
- itpragmatik 6y agoI just rented 2 bed apt in peninsula - absolutely no drop in rent - 1 year lease is norm (could not find any month-to-month lease) and I was not offered any free rent for any weeks. Not sure where this plunge is happening!
- ThrowAwayBay 6y agoMy lease in Sunnyvale is ending in 3 months, already last month my landlord approached me and asked if I want to stay for an extra year at a 5% increase. I told him I'd like to take some time to think about it and see where things are headed, but I'll need to get back to him soon. My house is below market already from looking at Zillow, and even with a 5% increase it still will be, but I'm not sure what I should do (besides asking nicely to drop the increase). I'm not sure if/how this will affect big 4-5 bedroom family homes vs. smaller places. Young single people can just up and leave, for a family it's less trivial.
- ccktlmazeltov 6y agoI've had that happen to me and I told them that I would move if they increase the price. I really didn't want to move, but I'm also too proud to let someone up my rent like that. It worked, they didn't increase the rent.
- ThrowAwayBay 6y agoYeah, we're both playing chicken I guess, and they're good landlords and I think the feeling is mutual; plus they really lucked out to rent to someone working at a very stable company with low risk of layoffs at the moment. So I believe I have better leverage at the moment, but if there are two things I hate, they have to be moving and negotiating.
- blackrock 6y agoYawn. Wake me up when the rents plunge 50%. The market there was already excessively over-valued. The virus proved how unnecessary they actually are. A real correction is good.
- ccktlmazeltov 6y agoHoly shit! I just checked craigslist and there are a number of super nice place in SF now for an extremely good price. There's no great place for sale though. I'm talking apartments that were above 4k/month which are now around 2-3k/month. I think this is a good time for me to change flat.