Are Bay Area rents bouncing back?
The steep discounts in Bay Area rents triggered by the COVID-19 pandemic may be dwindling with the health crisis. As California made reopening plans over the last three months, average prices for one-bedroom apartments climbed throughout the region, up 2.9% in San Jose, 3.6% in Oakland and 5.3% in San Francisco, according to listing site Zumper. But rents are still below pre-pandemic levels, suggesting a slow return of renters back to cities and offices. Record high home prices may also have kept more families in apartments  or out of town  rather than buying single-family homes. The creep up in rent signals a turn toward pre-pandemic conditions, but the Bay Area has been slower to rebound than other major cities, including New York, Boston and Washington, D.C.  Zumper CEO Anth Georgiades said the gradual price growth in California reflected the states cautious reopening schedule. But he believes Bay Area residential rents may not fully recover to early 2020 levels because some people who left will settle outside the region. Theres a significant minority of the population that will not return to the Bay Area, Georgiades said. This is real. Not everyone who left the Bay Area is going to return.  California lost population in 2020 for the first time in its history. High housing prices pushed many Bay Area residents to cheaper, more distant suburbs and other states to work remotely during the health crisis. The median price in June for a two-bedroom in Oakland increased 1.2% from the previous month to $2,530, grew 2.5% in San Francisco to $3,690, and stayed flat in San Jose at $2,700, according to Zumper data. The Bay Area cities remain among the top six most expensive places to rent in the U.S.  Other researchers have noticed similar Bay Area trends. The regions rents fell faster and deeper than any other market in the country, according to Apartment List researchers. Rental prices remain well under pre-pandemic levels in San Francisco (down 14%), Oakland (off 12.4%) and San Jose (down 8%). At their lowest point, prices for apartments in these cities fell between 15% and 25%, among the largest drops in the country. Apartment List researcher Rob Warnock said the Bay Area market began to turn in January, and prices have steadily risen since. But, he said, were still in this discount period.  Rents have climbed throughout the pandemic in cities attractive to California residents  for example, Boise, Idaho, Spokane, Wash., and Phoenix, according to Apartment List. Smaller California cities such as Sacramento, Fresno and Bakersfield also have become more expensive. Related Articles California renters locked out of 7,677 homes despite eviction ban  Gov. Newsoms $5 billion rent relief may right a wrong  Letters: Mixed message | Stop new hookups | Punishing landlords | Failing students | Threat to republic  Newsom, lawmakers agree to extend eviction ban, cover back rent  CDC extends eviction moratorium a month, says its last time  One driving factor in apartment prices inching back up has been tech firms starting to call workers back into the office. Apple wants employees to work on-site at least three days a week, beginning in September, with additional flexibility to work remotely two weeks a year. Google announced a hybrid approach to reopening offices, allowing most workers to telecommute two days a week. Employees can also petition to work from one of the online search and advertising giants offices around the globe. Facebook plans to gradually reopen half of its offices in September and wants workers to be on-site at least half of the time. The social media and advertising giant will allow some workers to move to lower cost areas, with a possible decrease in pay, as well. As workers begin to re-connect to their offices, the demand for apartments near business hubs is expected to grow. Zumper data shows South Bay rents have risen more quickly this year than in Oakland and San Francisco. But Georgiades said the pandemic has made many Bay Area startups realize the benefits of having satellite offices around the country, allowing them to draw from a wider talent pool for new employees. It also gives workers disenchanted with record Bay Area home prices a chance to buy a house and settle in a more affordable city. The move away from Silicon Valley business hubs may be long-lasting, he said. People stayed in Sacramento. People stayed in Phoenix, he said, noting two popular destinations for Bay Area migrants. People stayed in the suburbs.