San Francisco rents down 9.2%, lowest prices in 3 years

Rents for one-bedroom apartments in San Francisco have dropped by 9.2% since June 2019, according to Zumper. That's the biggest decline since the rental site started recording such data in 2015, and brings median one-bedroom prices down to levels not seen since March 2017.

With the economy faltering and unemployment numbers skyrocketing, Zumper's Crystal Chen said she expected to see a dip, but as a long-time SF resident, she said the nearly double-digit year-over-year decline was "still shocking." Plus, prices are unlikely to plateau anytime soon.

Median one-bedroom prices in San Francisco dropped almost 3% just in the last month alone.

She attributes the decrease in demand — also seen in other expensive cities such as New York, Boston and San Jose, though to a lesser degree — to a new prioritization for renters that puts cost and space over location. This is especially true in tech-heavy locations like San Francisco, where workers may be able to work from home indefinitely. "As more and more companies move into remote work, many renters don’t want to pay the big-city price tag when they are unable to use the amenities and are looking for more affordable options outside of large, metropolitan areas," she said. "If everyone is stuck at home, people are prioritizing having more space and comfort over city life."

Plus, with physical separation of the utmost importance to stop the spread of COVID-19, people are turning away from the time-honored tactic to save money: roommates. "I think most people would rather move elsewhere for more affordability than risk moving in with people they haven’t been social distancing with and potentially exposing themselves to the virus," Chen said.

Zumper saw a 6.4% year-over-year decline for two-bedrooms in San Francisco, with a similar drop for three-bedroom units.

Chen said the city's renters have their sights set on nearby locations that offer more space and affordability. Sacramento, Sonoma and Los Angeles have been the biggest beneficiaries of San Francisco's rental exodus, she added.

Though the price drop is a welcome change for renters who do want to stay in SF, the city still has the most expensive one-bedroom rents in the country, with a median of $3,360, according to Zumper.

So, even with a dramatic decrease in demand, will San Francisco ever truly be "affordable" again? "Things are definitely going to be shaken up, and more relief will come in terms of rents, but there will still be a floor that rents will drop to," Chen said. "We’ll have to see how low it goes in the coming months."

Emily Landes is a writer and editor who is obsessed with all things real estate.