Some monthly rents are still cheaper than before pandemic levels

In a region know for wildly expensive homes and apartments, the Bay Area now stands out in a different way — San Jose, San Francisco and Oakland are among the only major cities in the U.S. where monthly rents are still below prepandemic levels.

After two years of COVID-19 disruptions, median rents for a one-bedroom in San Jose are off 5% from March 2020, Oakland has dropped almost 14% and San Francisco is down nearly 17%, according to an analysis by rental site Zumper. At the same time, the median U.S. rent for a one-bedroom unit soared nearly 15%, led by higher prices in the Southeast and Southwest.

“The rest of the country is absolutely scorching,” said Jeff Andrews, market analyst for Zumper.

The Bay Area, he said, has “pretty anemic numbers compared to other cities.”

The growth in remote work, flight to the suburbs and COVID-19 restrictions have driven down demand and prices in the core cities, although some suburban rents have returned to pre-pandemic levels in the Bay Area. The region also has had some of the most restrictive COVID-19 protocols throughout the crisis, limiting arts, entertainment and restaurant activity that make city living appealing to many renters.

Bay Area apartment prices rose last year, but still have not come back to pre-pandemic levels and are far below recent records, according to Zumper data.

The median price for a one-bedroom unit in San

Jose is $2,420, down from $2,550 in March 2020, a recent peak. The median rent for a similar-sized unit in San Francisco is $2,910, down from $3,500 two years ago and 22% from the June 2019 high of $3,720. The median one-bedroom unit rent in Oakland is $2,070, down from $2,400 at the beginning of the pandemic and off 17% from its October 2019 peak of $2,500, according to Zumper.

The Bay Area numbers are especially stark compared to other U.S. cities, Andrews said. For example, rents in Miami have grown more than 40% from the beginning of the pandemic, leading increases in Boston (35%) and New York City (38%). Los Angeles saw an uptick of 2% during the same period.

“The snap back on the West Coast has not been as dramatic as it's been on the East Coast,” he said.

Although the vacancies may have pinched big-city landlords, renters are finding deals. Some properties still are offering free rent discounts for one or two months on listing sites.

Property managers and landlords report a softer market in certain parts of the Bay Area. The absence of international students at UC Berkeley lowered demand and prices, one property manager said. Demand for Mountain View apartments tanked as Google employees were allowed to work remotely, another property manager said.

Andrew Collins, CEO of rental platform Bungalow, has seen rents at its 1,200 listings generally rise across its 20 markets around the country, but not in the Bay Area.

“Really, the only major market that hasn't recovered is San Francisco proper,” he said.

The majority of Bunglaow's 70-person staff based in San Francisco decided to de-camp from city apartments to bigger spaces in Marin and the East Bay during the early months of the health crisis, he said. The startup has added employees during the pandemic, but trimmed the size of its office space in the Presidio.

The site caters to young professionals seeking roommates and leases between 4 to 18 months. Collins expects demand to pick up with a return to more regular office schedules and loosened restrictions.

“People are really craving this community,” he said.

Rental interest in San Francisco, Oakland and San Jose has been growing in recent months, driven by students and young professionals in Generation Z. A survey of rental applications by Yardi Matrix found the number of Gen Z renters looking to move into the San Francisco metro doubled between 2020 and 2021 while applications in the San Jose metro climbed by 50%.

Major tech companies and other large employers are requiring workers to return to the office at least a few days a week. Google announced a planned reopening for Monday and Apple set a return date for the following week. Other tech firms already have started bringing back employees part-time.

The return to hybrid and full-time, on-site work could push up demand for apartments near employment hubs.

The spring and summer moving season could bring higher prices, Andrews said. “It would be surprising if rent didn't continue to rise in the Bay Area.”