SAN FRANCISCO (KGO) — It’s not just homes that are flying off the market in San Francisco. The rental market is heating back up as dozens of major companies return to the office this week.
From eerie ghost town to a bustling city bouncing back.
“This time last year it was a ghost town,” said real estate agent Neil Canlas. “You could see the tumbleweeds on the streets of San Francisco.”
But, this year the city is starting to come back alive again – one indicator being the rental market.
“During the Pandemic, rentals were sitting on the market for a long time. At least a month or two, now they’re going off in a week or two,” said Canlas.
Canlas says in July last year only 25 rental listings closed on the MLS. Whereas, in just the past three months 188 rental listings closed.
“People are coming back and they need a place to live,” he said.
With people back, the prices are coming back too. The Canlas brothers say overall average rent for a two bedroom, two bath has increased up to 20 percent. But, that all varies on location. ABC7′s data analysis of closed MLS rental listings from the second quarter of this year show the biggest rent spikes were for condos in Mission Bay, South Beach, the Financial District, and parts of Polk Gulch.
Stephanie: “What’s the average rental rate for a two bedroom in Polk Gulch right now?”
Daryll Canlas: “The average is anywhere between $2,500 to $3,000.”
Stephanie: “What was it two quarters ago?”
Daryll Canlas: “Around 10 to 20 percent off, probably looking at $2,000 to $2,800.”
The heightened demand also impacting the city’s commercial real estate.
“People are moving back to the city,” said Robert Sammons, a senior researcher for commercial real estate firm Cushman and Wakefield. “It’s a great sign for our economy.”
“We are closing out the second quarter today and we will finish out with 7,000 sq. ft. of new leasing activity,” Sammons said. “That is the best since the first quarter of 2020.”
Signs of progress, but there’s still work to do. 20 percent of the city’s commercial buildings are vacant – the highest figure reported in the last two decades.
“It’s going to take time, maybe 2022 until we fully recover,” said Sammons. “But, we’re making progress and that’s a great sign.”
According to data compiled from Cushman and Wakefield, of the 140 major companies the firm tracks that are mostly based in San Francisco, 70 percent indicated they will have returned to the office in some capacity by July 1. That figure is expected to jump to 78 percent by the end of the year. Whereas, 22 percent of that group indicated they will be working from home indefinitely.