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San Francisco Bay Area Apartment Rental Report

October 11, 2020

San Francisco Home Rental Prices

The last two years were a big year of change for San Francisco, San Jose, Oakland the rest of the Bay Area. Rent prices have dropped from previous year’s averages.

As renters flee to Sacramento, Fresno, Bakersfield or cities in other states, Bay area landlords are left to deal with the rent and eviction moratorium along with rapidly falling rent prices.

This graphic below courtesy of Zumper, shows the current situation for one bedroom rentals in California cities.

Screenshot courtesy of Zumper

There’s a lot of disaster talk going on, but when you consider the work shutdown that took place in 2020, the situation in California could have been much worse. Yet landlords are worried about the duration of this slide in rent prices and vacancy rates and the threat of overdue rent never being paid. Stimulus aid talks have stopped, which means help might not be on the way until February.

Complex Outlook for Bay Area Rental Housing Owners

Assessing San Francisco’s rental market is very complicated. Rents are falling right now, and there are political, technological, economic and demographic trends going on that promise to send more renters out of the city, perhaps even out of state.

At the same time, sales of higher priced homes are rising and prices are increasing.  There are two real estate worlds in the Golden state.

The real issue is how Bay Area residents can survive the current market turmoil and whether landlords can maintain rental prices in San Francisco, Mountainview, Palo Alto, Oakland, San Mateo, San Jose, and South San Francisco.

Heading into the Fall and Winter Months

Now in the fall season, with a new set of economic, pandemic, and migration numbers, we’re wondering which way the housing and rental market might be headed in the winter and into 2021. The sensational headlines are all referencing year over year changes, which because of the pandemic shutdown are not all that relevant. The key stats today are the month to month momentum numbers as the economy seeks traction.

As with all else, pandemic case surge numbers are critically important. As you can see in the graphic below, California Covid cases are in decline. The chart shows Californians got the message and are observing health guidelines. And San Francisco County reports some of the lowest new cases in the state.

As of September 23rd, San Francisco’s moving average has fallen into the Orange or moderate danger tier. Some indoor businesses can reopen with 25% capacity limits. Most outdoor businesses can operate fully with some modifications. California has it better than most states due to climate during the winter, however there are threats from travel and the fires.

US Covid 19 cases are holding and California is performing well of late too, despite media reports to the contrary.

This graphic courtesy of Zumper tells us much of what we need to know about the Bay Area rental situation. Median rent prices in San Francisco dropped 14% year over year in September to a new price level of $3,040 for one-bedroom apartments on the market, the same as it was in August. Month to month drops are not all that dramatic.

Rent Prices in the Bay Area

Zumper says the price has dipped below $3000 the last few weeks and it’s not expected to rise back up. 2 bedroom prices fell .3% from August to a new average of $1470 per month.

Graphic courtesy of


Of course, San Francisco, San Jose, Oakland, Palo Alto, Menlo Park, Cupertino, Sunnyvale, Santa Clara, San Mateo, South San Francisco, and Mountain Park have some of the very highest rents in the country, let alone the Bay Area. The rent slides in these communities have increased, while rent prices in Livermore jumped 9.7%, Vallejo rents climbed 4.3%, and Concord apartment rents grew 3.4% YoY.

Stats suggest fewer people outside of San Francisco are looking for rentals in San Francisco and this is believed to be the only reason rent prices are falling. According to a report in SFgate, those who live in the region are staying put with no plans to migrate elsewhere.

Bay Area Rent Prices. Screenshot Courtesy of Zumper. 

Rent Vs Buy in the Bay Area

The buy vs rent question in California is firmly leaning to the rent side, due to lack of availability and rising home prices, $200k downpayment, while the general state economy is not recovering. The California housing market report reflects a polarized real estate market.

And in pricey San Francisco, rent prices are falling, renters are exiting the city to work remotely. Will the exodus create significant troubles for property owners in the city? Given tech workers and execs will want to live in the vicinity, demand for houses for rent will continue, while demand for high-rise multifamily apartments will keep falling.

The reason is falling income in the tech sector, some instability in tech stocks and their outlook, and the flight from Covid 19.

It’s said that San Francisco landlords and developers are getting desperate to get units rented and tenants leased and they’re offering up quite an array of concessions.

There is an expectation of another pandemic wave which could force the shutdown and perhaps bankruptcy of some California businesses such as bars, restaurants, and personal services at the retail level.

“It is clear that we have not tested the floor yet,” Georgiades said. “That will only come when the state-wide eviction moratorium expires. Whereas we at Zumper do not think we’ll see anything as dramatic as San Francisco’s rents halving, we are already down 20% from peak a year ago, so this story is not over yet.” — from news report.

Rent Cafe shows rents haven’t fallen as significantly as other reports suggest.

San Francisco DistrictSeptember 2020January 2020
Treasure Island$2,616$2,616
Van Ness – Civic Center$2,944$3,034
Downtown District 8 – North East$2,956$3,039
Hayes Valley$2,983$3,080
Russian Hill$2,983$3,053
Nob Hill$2,996$3,058
Western Addition$3,030$3,140
Bernal Heights$3,061$3,129

Data from above courtesy of

2021 Rental Market Outlook Bay Area

While the 2020 pandemic has caused severe damage throughout the US as well as Australia, UK, Canada, Germany and the rest of the world, silicon valley will return. The Bay Area is home to many of the major tech firms who produce software used around the world.

These companies see temporary lulls in stock valuations and revenue, but Silicon Valley is so dominant that political and economic changes don’t undermine the economy permanently.

The recent rise of stock prices on the NASDAQ is a testament to this fact.

The 2021 Rental Market Outlook

The pandemic recession will end, and the California housing market and San Francisco’s rental market should firm up as Covid 19 recedes. With some of California’s migrating, work at home remotely workers receiving reduced compensation, the balance sheets of Bay Area companies should improve, making them even more competitive in 2021 and beyond.

The worker migration of course is having a big effect on which are the best California cities to buy rental property.

And many of these companies are reducing their office space rentals for lower operational costs. The reduced pressure and cost of real estate should be a positive factor in Silicon Valley’s outlook.  However, landlords may still enjoy a healthy rise in rental ROI, bonding well for California property management companies.

So the 2021 outlook isn’t as bad as most predict. In fact, if businesses reopen and new startups roar back to replace lost businesses, it stands to reason that California rental prices and home prices will roar upward too.

If trade borders are opened by the Democrats in 2021, if they win the upcoming election, that would improve the business outlook for California and Silicon Valley.

While rent vs buying is on the minds of many hopeful homeowners across the U.S., those in the San Jose San Francisco Bay Area might be resigned to the belief they can never own their own homes. And home ownership is lowest in the state of California.

New state laws from Governor Newsom may pour more fuel on the fire for rental property owners as with extensions of eviction moratoriums.

October Rent Prices in California Cities. Screenshot courtesy of Zumper

The priciest places to rent in San Francisco were Mission Bay at $4060 per month and South Beach at $4022 per month. The least expensive neighborhoods are Hayes Valley at $2764 per month and Van Ness Civic Center at $2808 per month.

Most Expensive Rents in San Francisco?

The most expensive rental home in San Francisco is a 4734 sq ft townhouse on S Van Ness at $18,476 per month.

3 bedrooms in Nob Hill: $8,442

3 bedrooms in Downtown District 8 – North East: $8,085

3 bedrooms in Telegraph Hill: $17,000

2 bedrooms in Presidio Heights: $6,741

1 Bedrooms in Mission Bay: $3,711

Studios apartments in Mission Bay: $3,276

Wages were continuously rising in San Franciso County, and although 2020 the pandemic year has eaten into the trend, the county will recover by 2022.

Screenshot courtesy of

Is San Francisco one of the best cities to invest in real estate? It has a fantastic economy yet the cap rates are the lowest in the nation.

Are you managing a large number of properties in the Bay Area? Are you an HOA manager struggling with volume? If you’re still using spreadsheets, paper receipts and phone calls, you must be feeling the pressure. How about shifting up a more modern approach to property management that’s easy to learn and implement?

Check out ManageCasa Property Management Solution Online and see for yourself.

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See also: HOA Software | Los Angeles Rent PricesProperty Management Software | Rental Homes | Apartments for RentRenters InsuranceUSA Rental Housing Market | Apartment Management Software | Apartment Rent Prices | Apartment ConstructionHow to Screen Tenants |  NAA | Starting a Property Management Business

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