As expected due to the coronavirus pandemic, asking rent prices have dropped since March 1st in many places around Northern California and the Bay Area. However, that hasn’t been true for all counties, and some have recovered already, while some continue to decline.
As renters abandon tiny urban apartments for suburban space and privacy now that their long commutes have been eliminated due to work-from-home policies—or because they can no longer afford the cities’ sky-high costs—asking rents in San Francisco and San Jose have plunged about 7% from March to August and show no signs of recovery. The East Bay and Santa Cruz were less affected, down only about 2% and on a slow decline, while North Bay counties and inland California counties are actually up about 2%. Santa Rosa in the north and Vallejo-Fairfield in the south both saw initial drops but have recovered and are now up about 1%, and Napa rents have fluctuated dramatically with ups and downs but are now up 2%—just in time for wildfire season.
Stimulus checks and unemployment benefits have certainly been factors in the stabilization of rents in the cheaper markets, so it remains to be seen what the effects will be on asking rents now that those benefits have expired and a replacement package isn’t likely to arrive any time soon.
A lot will depend on the state of the country at this time next year; when it comes time for this year’s leases to renew or expire in 2021, will it be safe to move back to the cities? Will the economy have recovered enough for the surge of suburban moves to be temporary? While we don’t expect to see a rush back to urban areas, other cities across the country have already begun to stabilize; San Francisco and San Jose are very much outliers.