San Jose, S.F. lead nation in plunging rent — while inland California sees most price growth

San Jose housing rental prices in December were down 13.7% year over year, the nation’s sharpest decline, according to a new report, and San Francisco wasn’t far behind.

Rents were down 13.7% in San Jose, New York followed with an 11.7% drop, and San Francisco had the third-biggest decline, 9.4%.

California boasted the metro areas with the biggest booms in prices: The Inland Empire (east of Los Angeles) and Sacramento.

The report from real estate data firm Yardi Matrix showed the split during the pandemic between pricey coastal markets and nearby lower-cost metros continued.

San Jose has been at the bottom of the growth list seven consecutive months, with rents down 14.1% since March.

Rounding out the bottom five in December were Seattle, with a 6.2% drop, and Washington down 4.9%.

Yardi Matrix surveys renters of market-rate properties with at least 50 units to determine market conditions, measuring rental rate change and rent concessions. It excludes fully subsidized properties.

The findings from Yardi Matrix differ from rental listings websites Zumper and Apartment List, which have shown San Francisco rent prices plummeting more than any other major metro area throughout the pandemic, including in December.

The Yardi Matrix report attributes the exodus from big cities to job losses around tourist-centric industries.

“As gateway markets are some of the most expensive to live in, and with job losses disproportionately impacting service workers, it became impossible for many to pay rent, so the only choice was to move,” the report said.

Another factor was the large number of employees shifting indefinitely to remote work.

“With most amenities in these urban areas closed, the desirability of living in an urban setting and paying high rents has been lost,” the report said.

While a significant decline continues in expensive gateway markets, nearby smaller market cities have seen strong growth in rental prices during the pandemic. California’s Inland Empire (7.3% year-over-year growth) and Sacramento (6.1%) top the list for the past four months. Phoenix, Tampa and Las Vegas rounded out the top five in December.

Zumper’s latest national rent report put San Francisco first on the list for year-over-year declines for one-bedrooms in the country’s most expensive and largest rental markets, falling 24%. Oakland was second (22%), followed by Seattle (20.6%), New York (19.7%), Boston (17%) and San Jose (14.7%).

Despite the sharp declines, Zumper’s report found San Francisco remains the nation’s most expensive rental market. Despite huge drops in the country’s priciest markets in 2020, the list of the top 10 most expensive changed very little, Zumper said — indicating “just how much more expensive these rental markets were than the rest of the country.”

Zumper’s January 2021 Bay Area report showed additional nuance when comparing other Bay Area cities. Santa Clara’s rental prices also dropped 24% year over year, and Menlo Park and Mountain View were close behind at 23.4% and 23.8%, respectively.

Zumper aggregates data from more than 1 million active listings, which includes newer builds and excludes listings that are occupied or no longer active.

Kellie Hwang is a San Francisco Chronicle staff writer. Email: kellie.hwang@sfchronicle.com Twitter: @KellieHwang

Article source: https://www.sfchronicle.com/realestate/article/San-Jose-S-F-lead-nation-in-plunging-rent-15878339.php

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