San Francisco Drops To Third Most Expensive Average Rent In US According To New National Rent Report

A new National Rent Report released on Tuesday by the rental research company Zumper found that San Francisco rents moved down to only the third most expensive in the country, with Boston overtaking San Francisco for second place as the city with highest rents.

Since the beginning of the COVID-19 pandemic in San Francisco, a mix of high crime, more remote work opportunities, and companies pulling out of the city relieved the number of renters in the city, as well as how much new renters are willing to pay. Last year, San Francisco fell to second place under New York City as the most expensive city in the U.S. to rent. But with San Francisco’s corrections, as well as a country-wide market correction happening following remote work migrations to states in the Southeast and Southwest parts of the country, San Francisco fell yet again.

In October 2022, median prices for 1-bedroom apartments stand at $3,860 a month in New York, $3,060 in Boston, $3,020 in San Francisco, $2,600 in San Jose, and $2,510 in Miami. Besides San Francisco, San Diego also fell, going from 5th place to 6th place, with Los Angeles, Oakland, and Santa Ana showing little change in 7th, 9th, and 10th place respectively.

However, San Francisco was not the only falling rent in the Bay Area. Between 2021 and 2022, the average rent price in San Jose went down just over 6%, with Oakland also showing signs of slowing down.

Besides emigration out of California and more remote opportunities, other factors have pushed other cities above California cities for expensive rent. Boston, for example, favors mostly single family housing, fueling a gigantic housing crisis in the city causing rents to skyrocket. Older renters in New York moving out and having rents reset at a new higher price have kept prices highest in the nation. And cities like Miami and Austin, which saw massive growth during the pandemic, now rival Californian cities with high rent prices, causing a slowdown of people moving as a result.

“In many metro areas, declining prices are actually a correction to prices that’d become overly inflated,” said Zumper CEO Anthemos Georgiades in a statement. “We saw historic levels of migration throughout the pandemic, as people switched to working from home and re-imagined their living situations. Now—with a turbulent, unpredictable economy causing fear of recession—migrations are slowing, occupancy rates are falling and rent prices are following suit.”

San Francisco falls to third most expensive rental city

While still turbulent, markets in the San Francisco Bay Area and Southern California continue to have new renters, but the overall slowdown, as well as those looking for cheaper rent are causing many cities to feel the pinch.

“A lot of areas are still gentrifying, and we had developers waiting since before the pandemic to build new luxury apartments,” apartment leasing consultant Steph Henderson told the Globe on Tuesday. “So a lot of these places are now getting built and ready to lease just as we are looking down the barrel of a recession. So, yeah, people want to save money and many are looking for more remote opportunities, but we are also seeing a lot of bad timing, especially in areas that are gentrifying and looking for higher rents they thought they could justify.”

“You also have to factor in the trend of people returning to California. We’re seeing rents not drop in many places too in part due to people who moved out of state for a few years and then moved back. You’d be surprised just how many are calling asking or help. The days when U-Haul lots have no cars in California because so many people moved out isn’t as true anymore. A lot of people did not like Florida or Texas or especially Arizona as I’ve found. The political climate deterred some, the weather in others. We’re seeing a bunch of Florida people move back now due to the hurricane damage there, and a lot of people from Texas are tired of the heat and the power going off a lot because of cold snaps and such. A lot of factors are going into why San Francisco and other cities aren’t as expensive as other cities anymore, but they are staying high for many reasons too.”

Other rental reports showcasing rental rate changes are due to come out by the end of the year.