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Rents for a one-bedroom apartment in the major metro area were down 9.2 percent in June when compared with the same period last year, according to data from rental site Zumper. That is the largest decline since at least 2015 and brings the price point ($3,360) down to where it was three years ago.
In the U.S. overall, one-bedroom rents fell by just 0.2 percent. No other major metro city’s data came close to the decrease in San Francisco.
Anthemos Georgiades, the CEO of Zumper, called the San Francisco price decline “unprecedented” in a Twitter post, saying it supports the theory that people are starting to leave the city as options for remote work in the technology sector become more widely available.
While other large metropolitan areas can attribute real estate challenges to mass layoffs that have resulted from the pandemic, the sheer size of the rent drop in Silicon Valley indicates there is something else going on.
“Turns out a lot of the online hype about Silicon Valley's move to remote is … now borne out by the data,” Georgiades wrote in a Twitter post.
In Mountain View, California, where Google’s headquarters are located, rents fell nearly 16 percent. Prices dropped 14.1 percent in Facebook’s home, Menlo Park, while they also fell 14.3 percent in Cupertino (where Apple's headquarters is located) and 10.8 percent in Palo Alto.
Rent prices in another high-priced California city, Los Angeles, were down 3.6 percent by comparison.
Georgiades noted the price plunge in Northern California could be even steeper than what the Zumper data indicates because landlords can conceal price drops in special terms within the lease, like offering a certain amount of weeks’ worth of free rent to move in.
When leases come back on the market they are often offered at lower price points.
As previously reported by FOX Business, San Francisco is not the only major metropolitan area facing a flight of residents. Local moving companies in New York City called the number of move-outs they have seen over the past couple of months “insane,” with activity levels significantly higher than any of the other markets they serve.
Many people from Manhattan are either headed to nearby suburban locations in New Jersey or Connecticut, or they are headed to states in the South, including Florida, South Carolina and Georgia.