[PragmaticPulp]

I actually know several people who used this as an opportunity to move into the Bay Area. The sudden drop in rents made it more attractive and they jumped.

They both work in industries where face to face communication is a competitive advantage. It’s easy to forget that not every job is naturally compatible with remote work like it is for those of us who type on computers all day.

[iancmceachern]

I'm in this boat. We moved apartments in SF during the pandemic and we now live in an amazing neighborhood, amazing building, for 40% less then we were paying for a below average apartment before.

It's not one or the other (moving in or out), it's about getting what you (the individual) wants, and being smart about timing and using world events to your advantage, not disadvantage.

Some people wanted to move away from SF, some wanted to move in. It was an opportunity for either.

[sheepybloke]

Where have you been seeing the rent drop in SF? I'm in the south bay and have been interested in moving to SF now that I'm going remote, since I want a bit more active nightlife. Now that I'm remote, I don't have to stay in south bay.

[acchow]

Largely SOMA and parts of the Mission and the Van Ness corridor. It's mainly areas which generally feel less like a neighborhood and more like a bustling city - mainly areas where renters are more OK with living in than homeowners would be willing to purchase in. A great example is the new Chorus building which opened in 2021 on Van Ness and Mission. It remained mostly empty throughout 2021 despite offering 10 weeks "free rent" with a 1 year lease. Stunningly gorgeous building, incredible amenities, but a subpar location - a condo here would be sold at a heavy discount because of the location, thus this is a luxury rental apartment instead. Across the street is the new Fifteen Fifty building, also with heavy "free 2 months rent" discount for a 1 year lease.

But even in the most desirable neighborhoods, rents are still down about 10-15% compared to pre-COVID

[iancmceachern]

I would revise this statement: "mainly areas where renters are more OK with living in than homeowners would be willing to purchase in"

To say: Areas that appear less like traditional neighborhoods with single family homes and more large modern condo buildings.

Our building, and many around ours are largely condos, not rentals. They don't look like traditional houses, but even in this more modern area with multi story buildings and retail all over the 1st floor it's not that it's a place that people don't want to buy homes, it's that there are no "homes" to buy, just condos.

[ido]

Is the word home not used to describe condos as well? I would have figured it’s a place with no houses to buy.

[acchow]

yes, buying/owning a home does include condos.

[acchow]

I use the word "home" to also include condos. Home does not mean "house".

Hayes Valley has tons of condos - homeowners want to buy here. Homeowners don't really want to buy at 6th and Mission and a Condo there would be heavily discounted per sqft.

Mission Bay also feels like a neighborhood - calm, some park space, all condos

[teebs]

Rents are definitely down - or at least they were 1.5 years ago when I last moved. Before the pandemic, 1 bedrooms were usually at least $3500 and often $4000+. When I looked last January, there were decent places between $2500 and $3000. I emailed some landlords saying "is there any chance you could go lower" and they offered me free rent for 1-3 months. I ended up with a pretty good deal on a large one bedroom in the Mission.

Rents have gone up since then from my understanding, but they're still below what they were several years ago. https://www.zumper.com/rent-research/san-francisco-ca

[soul_grafitti]

I have seen more 'For rent' signs in the last 3 or 4 months than I have in the last 15 years I've been living here. No idea how that translates to rent prices though.

[iancmceachern]

Many buildings around us have not since raised their rents. Still bargains to be had.

[urthor]

$3000 a month for a modern building, good one bedroom? Not a studio.

In SOMA/Mission? That's genuinely somewhat affordable for tech workers.

You'd get a terrible studio in Manhattan for that, plus all sorts of fees.

San Francisco's reputation is letting itself down. The house price bubble must only be for 3BR family homes with a yard in San Jose/Palo Alto.

[tshaddox]

I haven’t seen these supposed rent drops in SF or the Bay Area either. My lease in the peninsula is up next month and the rent is increasing about 8%, and that’s aligned with the prices I’m seeing elsewhere for comparable apartments.

[iancmceachern]

We've known multiple people whom their building was expecting they'd continue their lease at the higher rent while offering the lower rents to the general public for new tenants. I'd encourage you to find out what they're advertising rents at for new tenants and then hold them to that advertised rent.

[tshaddox]

The available units listed on the website are even slightly higher prices.

There’s another nearby building that’s extremely similar (same developer, I believe, and very similar floor plans, appliances, and amenities). Last summer comparable units in that building were priced the same as in my building, but are now a ludicrous 20-25% higher than my building.

[arcticbull]

Things are rising a bit now but if you jumped into a new place in like 2021, the discounts were pretty absurd.

[iancmceachern]

Check out SOMA, dogpatch, Potrero, south beach, etc.

Rents are still significantly less around here than before the pandemic.

[dominotw]

> sudden drop in rents

Curious, Why aren't properly prices droping to reflect the loss in population.

[picture_view]

It’s possible most of the 6.3% did not own property and we’re not in the market to buy property, so there was no change in that market.

[tekknik]

Even renters increase housing costs. Housing is finite and some people sit on the fence about buying or renting. An inability to find a rental unit sometimes tips them into the buying territory

[okaram]

And I'd assume house selling is fairly elastic in the short term. If property prices go down, people would decide to wait.

[lazide]

Speculators betting it will come roaring back afterwards, money still getting cheaper, folks with families that can’t move, inability to ‘just move’ if you own, all probably contributing.

Housing prices have been out of whack with fundamentals (cash flow) since at least ‘12-‘13.

[jethro_tell]

Here's another more bleak option. Just like in 2008 when corporations bought up huge swaths of the housing market for cash while no one could get a loan. (which is part of the current issue with not enough homes to buy)

They aren't betting the market will come roaring back, they are betting that they can corner the market and housing will be a subscription just like everything else they sell.

Rent seekers aren't going anywhere, and the cost is really immaterial to them for the most part. They don't need cashflow, they need a monopoly.

[fennecfoxen]

As usual, the “speculators” and “out of towners” and others are convenient scapegoats, lest we have to face the underlying supply and demand and barriers to development.

You want to have a monopoly on housing in a major city? I’d be hard pressed to point out an industry where that would be harder. You have literally millions of competitors.

[urthor]

Absolutely this.

The out of towners, who are mostly Blackrock, is just a fella with a spreadsheet tracking new dwelling approvals vs demand.

All the Bay Area has to do is approve new dwellings. The issue is the politicians are landlords with investment properties.

[seanmcdirmid]

San Francisco is already the second most densely populated city in the USA (the first being NYC). SF is actually already slightly more densely populated than Tokyo, which many like to tout as a mecha for de-regulated zoning.

[heiniunai]

With around 6,300 people per km2, "it is similar in terms of population density to San Francisco. In Tokyo’s 23 wards, however, the density is 15,381 people per km2, making it 50% higher than New York City as a whole."

https://japanpropertycentral.com/2021/12/housing-in-tokyo-is...

The 23 wards of Tokyo are 5 times the land area of SF city proper.

[synaesthesisx]

But the difference is, NYC is constantly building new housing inventory, with constant construction and developments going up left and right.

Meanwhile most of San Francisco is just streets of old single-family homes.

[dublinben]

>San Francisco is already the second most densely populated city in the USA

This isn't true, even if you limit it to cities with population over 100k. New York City, Jersey City, and Paterson, NJ are all more dense than SF.[0] San Francisco is effectively tied with notoriously anti-development Cambridge, MA. Quite a few smaller cities around the country are more dense as well.[1]

The housing situation in San Francisco is nothing to be proud of, unless you think that having the highest median home prices or median rents is a laudable achievement.

[0] https://en.wikipedia.org/wiki/List_of_United_States_cities_b...

[1] https://en.wikipedia.org/wiki/List_of_United_States_cities_b...

[lazide]

That assumes they'll get takers on the areas though.

With remote work becoming more of the norm, what if the labor market doesn't move back?

They'll have a monopoly that few ever pay rent on, and they'll go broke (while the houses rot).

[heavyset_go]

Urban areas are desirable even outside of the availability of high paying jobs. There are neighborhoods in America's desirable cities filled with the adult children of wealthy people who pay their kids' insane rents while they pursue arts, fun and wait tables or bartend on the side for petty cash or to keep busy. That section of urban residents are not dependent on high paying jobs and will continue to seek out cities for the lifestyle aspect.

[jethro_tell]

Sure, It's not a sure thing forever and not all areas are going to be winners, but if you have a big enough budget, you can just buy houses everywhere for a long time and probably make decent rent for a while. Heh, if not, or when it ends, they can just dump it and or the company and walk away. It's not like they are doing it with their own money.

[marvin]

This is a spooky narrative, but the rent seekers can't be the majority. My understanding is that many Californian real estate markets are kept artificially tight due to various forms of NIMBYism.

If renters become the majority, it's suddenly no longer viable to limit new housing through regulation. Markets are nowhere near the fundamental limits of homes per square meter of the state that's good to live in.

[jethro_tell]

I don't think they are a majority and I think the main problem is lack of housing being built. But I do think that what housing is out there on the market faces stiff competition from companies not people. I'd assume there are a few people buying houses with cash but my guess is a lot of those stories you hear about people bidding 100k over ask and losing to a cash offer are mostly not people.

Theres a good number of companies that are open about increasing their housing portfolios. Even construction companies that built thousands of starter homes per year converting to rentals only.

These are long term changes, and not a quick cash grab at the bottom of the market.

[Schnitz]

Homeowners are a reliable political cohort, they tend to organize quickly as soon as any issues are on the agenda that might affect the value of their land and they will reliably push for whatever increases land values. They show up at city hall to make sure they are at least the loudest group on the issue. Homeowners are also diligent voters. You’ll need more than 50% of people to be renters to counter this, unless you can convince renters to organize as reliably and passionately as home owners.

[jjav]

> Homeowners are a reliable political cohort, they tend to organize quickly as soon as any issues are on the agenda that might affect the value of their land and they will reliably push for whatever increases land values.

I feel like this is a myth, do you have research to back this?

As a 20+ year home owner, I've never been asked to support anything to increase land/housing value (not that I'd want to, since that means higher taxes for me, which I'd rather not).

I don't think this homeowner cabal to increase values actually exists. If it does, nobody invited me and nobody invited any of my homeowner friends (which is all my friends) either, so it can't be a very large group.

[teebs]

Many of my friends who are tech workers who've worked at unicorns and tech giants for 5-10 years bought their first homes in SF during the pandemic. I would guess part of the drop in rents is a shift in demand from former renters to new homeowners. Also, there was a general increase in prices across all asset classes during the pandemic that continued to drive prices up. Finally, property prices have actually gone up less in SF than they have in the US as a whole, likely because of the general effect of people moving away - compare the change from January 2020 to today in this chart https://fred.stlouisfed.org/series/MSPUS vs this chart https://www.zillow.com/san-francisco-ca/home-values/

[chrisco255]

We are still in the early stages of the bubble deflating.

[seanmcdirmid]

The loss of population is directly caused by property prices, so if they were reduced, the loss would reduce or reverse and we simply would't be talking about population loss anymore (seriously).

[chiefalchemist]

Yes, but probably not all. WFH has enabled those not interested in SF property to go for their property elsewhere.

It's also difficult to imagine demand increasing again and prices falling or even staying level. The issue with SF, NYC, London, etc. is sqr miles are effectively fixed and zoning limits how many residential units you can add to the market.

[seanmcdirmid]

Maybe? Just as many people are probably staying in or moving to SF because they remote work to a job in the valley (eg San Jose) and not commute that much. They aren’t so price sensitive and value being in the big city. Until SF is undesirable, demand will keep, rents will remain high, and people are going to be priced out.

[jacobr1]

One of the items that seems to be missed in these kind of discussions is the increased demand for what otherwise would be called sprawl. You hear about people want to stay in a big city, or want to move to $tier3 city, but there is also a large cohort that wants to move to within 1.5 hours of bigcity, so I can maintain my network/family/work in the office once a month/etc ... This "sprawl" space is't a limited as the cities proper ... but with commutes was effectively limited. That limit is gone for large groups of remote/semi-remote workers.

[IfOnlyYouKnew]

I don't know the answer but I do know that all the attempted answers currently posted get the basics of economics spectacularly wrong.

My money is on either this census data or property value data simply being wrong. Housing is a famously inelastic market and a 6.4 % drop in demand should lead to a double-digit decrease in rents and values.

[refurb]

Limited housing stock and people upgrading from rental to a home goosed demand and prices.

I’d also assume people who bought a place are less likely to sell and leave than someone renting.

[RC_ITR]

If everyone who left was living in a 2 bedroom with a roommate and now that space is a one bedroom with a home office, then why would rents fall?

[sokoloff]

Presumably the willingness to pay a given amount from just one person’s income is lower than that of two people’s income. Add in additional temporary uncertainty in big parts of the tech market and I can see a lot of currently occupied units having a tenant not willing to renew as-was.

[IfOnlyYouKnew]

Is the former roommate paying twice as much? If not, their rent has fallen, for statistical purposes.

[Schnitz]

Condos did drop, single family homes did not.