Rental market returns to pre-pandemic levels, but not in all metropolitan areas

SAN FRANCISCO — All major metropolitan areas across the country have seen rent prices return to pre-pandemic price levels, except one.

If you guessed San Francisco, you guessed right.

While by no means or by definition cheap, the cost of rent in San Francisco still hasn’t returned to where it was in March 2020 with a median one-bedroom rent of $2,995.

“We’re actually the last place that hasn’t fully rebounded. If we look at all the major metropolitan areas across the country,” said Rob Warnock, senior research associate for Apartment List. “Last month was in San Francisco and San Jose where rent prices were still slightly lower than they were at the start of the pandemic.”

Since June, rental prices in San Jose have returned to normal. Rent in San Francisco is still 2.5% lower than it was. In Manhattan, monthly rent has reached new stratospheric heights.

Warnock attributes the lack of rebound to two things, the 6.7% drop in population that San Francisco faced at the start of the pandemic and this: “San Francisco has the highest concentration of remotely capable jobs” .

These remote jobs and limited office requirements may have changed neighborhood preferences. The North Side of San Francisco, previously undesirable for people traveling to Silicon Valley – especially Pacific Heights, Cow Hollow and the Marina – has reverted to old ways of apartment competition.

“There are bidding wars for properties that have a few different types of features; whether they have a patio or a balcony or a yard or an outdoor space,” said Lisa McCarrel of Move Bay Area.

Look at the shiny new skyscrapers that dot Mid-Market, East Cut, Hayes Valley and the Van Ness Corridor. McCarrel said what might have seemed claustrophobic during the pandemic now has price-trading potential.

“The condos in this neighborhood flew off the market in a day and now they’re staying on the market longer,” McCarrel said. “There can be price negotiations – whereas in 2019 that just wasn’t possible.”

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