It’s the first time New York has been ahead of San Francisco since Zumper started tracking rental data in 2014.
The spread between the two major cities has been shrinking steadily in 2021. In early 2019, median one-bedroom rent in San Francisco was more than $800 more than New York’s. While both cities saw rents plummet amid the pandemic — median one-bedroom rent fell 23.4% in S.F. since March 2020, while New York’s fell 17.5% — both were poised to rebound when COVID-19 vaccines became more widely available.
But since January 2021, New York rent has risen by 19.6% and is now down only 1.4% relative to March 2020. With rent nearing roughly where it was before the pandemic, NYC has rebounded, while SF rent is up only 4.5%.
When asked whether this spread was here to say, Zumper data journalist Jeff Andrews wasn’t sure. “It’s hard to say with any level of definity because the delta variant is a huge wild card, but in the near-term, you could see S.F. pass NYC again,” he said. “You could see them swapping spots a few times.”
The high concentration of tech workers is thought to be the main reason for the lack of rising rents. Many companies still have yet to return to the office, and these employees in general have adopted more permanent work-from-home policies.
“I think the primary thing to consider is this: New York rent is now down only 1.4% relative to March 2020, meaning it’s basically regained all its losses over the pandemic. How much more growth does it have given it’s already near its pre-pandemic peaks?” Andrews posited. “San Francisco, meanwhile, is still down 20% relative to March 2020, meaning it has a lot of room for growth. Offices reopening would likely draw people back to SF and thus drive rent back up, but that’s looking more and more like it’ll be 2022 before that happens.”
As for the rest of the Bay Area, Oakland may soon drop below its spot at No. 7, with San Diego rents rising in August to match the median one-bedroom rent of the East Bay city.
San Jose stayed steady as the fourth most expensive market in the country, with almost no significant change in August. Meanwhile, rents are still skyrocketing in other parts of the country, with the median one-bedroom rent up 9.2% year-over-year, while two-bedrooms are up even more at 11%.