California Rents Decline
October 1, 2020
Rent prices continued to plunge across the U.S. last month, with San Francisco leading the decline, according to data from Zumper, a real-estate start-up.
Los Angeles rents declined by 11% year over year, with an average median one bedroom apartment now renting for a measly $2,020.
The median rent for a one-bedroom apartment in San Francisco dropped more than 20% from a year ago, to $2,830, according to the report. That's the largest decline the company has recorded. Month-to-month, the price of a median one-bedroom in the city dropped nearly 7%, according to Zumper.
Zumper CEO Anthemos Georgiades pointed toward a flood of supply in the market. Some renters may be inclined to move to the suburbs to get more space, as the Covid-19 pandemic spurred companies to close offices and allow employees to work from home. Facebook and Google, for example, have told employees they can work remotely at least through next summer.
Rising unemployment may also be forcing some people into less expensive areas.
The wildfires and hazardous air conditions added another incentive and may have "tipped the balance about their medium-term location choices," he said. Last month, the air turned dark orange in the city for one day as high-level smoke from the fires up and down the West Coast blotted out the sun.
While presenting the data over Twitter, Georgiades said he still has faith the market will bounce back, although it may take years.
"Despite everything our data is showing, there are so many signals that it will recover, however contrarian this point may sound," he said. "However, I think we're talking years to fully recover, not months."
Houses in SF and LA are still selling. They're just on the market for longer periods of time, and not receiving as many bids as they did in recent years. SF reached its highest number of home listings in August 2020 at $1,483, and price cuts have become more common.