San Francisco and the rest of the Bay Area saw apartment rents fall in January at a higher rate than the national average, another sign of a slowing Bay Area economy that could be hurt further by mass tech layoffs.
San Francisco median rents fell 1.1% to $2,174 per month compared to December, one of the biggest drops in the country. Metro area rents are down 5% compared to March 2020 when the pandemic started, making San Francisco and San Jose the only two metro areas with more than 1 million people that have rents that are below pre-pandemic levels.
National rents fell for the fifth straight month, with prices down 0.3% compared to December. Prices are still up 3.3% compared to January 2022, but growth has slowed in the past two years. Two-thirds of the 100 largest U.S. cities saw rents drop month over month.
A wave of layoffs in tech is expected to reduce demand for apartments in the Bay Area. “Softness in the tech industry is likely to prevent a strong rebound in Bay Area rents,” Apartment List said.
Nationally, rents are expected to climb again during the busier spring and summer months.
Bay Area home values have also declined in the last 6 months as mortgage rates have shot up, according to Zillow.