Prices are down 27% from January 2020, but the rental site indicated that while prices continue to fall, an economic upswing in the spring could bring a rental rebound.
“After an unprecedented year, rents in San Francisco are down nearly 27% since January, more than any other big city in the nation. The price drop is tied closely to a drop in demand, as the city’s vacancy rate more than doubled from March through August,” a spokesperson for ApartmentList told SFGATE. “But in the last quarter of 2020, vacancies flattened and rent declines slowed, possibly signaling that a rebound is on the horizon in 2021. The spring is typically when the rental market heats up, so if the economy improves over the next few months, it’s reasonable to expect that prices in SF will start to tick back up.”
San Francisco rental prices are down 27% from January 2020, according to Apartment List.
Apartment List
Rental prices in Oakland also continued to fall in December, dipping another 0.8%. The city had a total decline of 13.7% over the past year, with two-bedroom median rent currently at $1,950.
Rent didn’t decline everywhere in the Bay Area in December. Walnut Creek saw prices go up, with a month-over-month increase of 0.6%, in December, though they ended the year down 3.1% overall.
Rent in San Francisco declined another 2.7% in December, according to a new report from Apartment List.
Apartment List
Zumper saw similar findings in their most recent rental report. The median price for a one-bedroom apartment was down another 1.5% in December, with a 24% year-over-year decline. Zumper puts the median rent for a one-bedroom at $2,660 and a two-bedroom at $3,500.
Zumper’s migration data shows that while many Bay Area renters moved in 2020, most weren’t interested in moving very far. The Sacramento-Stockton-Modesto was the most popular destination for Bay Area renters and the top five metros were all in California.
We may continue to hit historic declines in San Francisco, but I’m here to remind you that San Francisco’s median two-bedroom rent of $2,305 is still more than double the national average of $1,090.
A recent housing market forecast suggested that Boise, Fresno, Seattle, San Jose, and the San Francisco Bay Area could be five of the strongest real estate markets in 2021. The report came from the research team at Realtor.com.
In their estimation, those five metro areas will see the biggest home-price gains during 2021, among the nation’s 100 largest metros.
These, and other housing markets on the list below, share something in common. They all have very inventory levels, combined with strong demand from buyers. And that puts upward pressure on home prices.
Top 10 Housing Markets for Price Growth (Forecast)
Real estate market forecasts for Boise, Fresno, Seattle, San Jose, and the San Francisco Bay Area suggest that prices could continue to rise steadily in 2021. This is according to the housing analysts and researchers at Realtor.com.
On December 2, the company published a “2021 Housing Forecast” with data and projections for cities across the U.S. Specifically, this report offered predictions for home sales and prices during 2021, for 100 of the nation’s biggest metro areas.
According to the authors: “Amid COVID-19 uncertainty, 2021 will be a robust sellers market as home prices hit new highs (+5.7%) and buyer competition remains strong…”
We sorted their list of predictions based on year-over-year price growth, to see which real estate markets have the strongest forecasts for 2021. The metro areas of San Jose, Seattle, Boise, Fresno, and the San Francisco Bay Area took the top five spots.
Here are the top-ten housing markets in Realtor.com’s forecast, when sorting by (predicted) year-over-year price growth:
The state of California made a strong showing in this report, taking five of the top-ten spots. That’s not surprising, given the severe supply shortages that are affecting many cities across the Golden State.
It’s also not surprising to find Seattle, Washington and Boise, Idaho at the top of this real estate market forecast for 2021. Those cities — like most others shown in the above table — have a serious imbalance between supply and demand. (Plenty of demand, not enough supply.) And that’s putting upward pressure on home prices.
Analyzing the Top 5 Metro Areas
Tech hubs. That’s one of the things the top-ranked housing markets have in common.
With the exception of Fresno, all of the metro areas listed below have strong tech industries that attract high-paid workers from around the country and globe. This brings more home buyers into the market.
As you’ll soon see, these metros have other things in common too, like a heavily skewed supply-and-demand situation.
1. San Jose, California
Housing development in San Jose, CA. Photo by Sean O’Flaherty.
Over the past few years, the San Jose real estate market has been a story of extremes. It has some of the most expensive homes in the country, based on price per square foot. It’s also one of the most competitive housing markets, due to limited supply and strong demand from buyers.
Given these factors, it’s not surprising to see it receive such a strong home-price forecast from the research team at Realtor.com.
San Jose will likely experience a market downturn sometime in the future. The current rate of home-price appreciation cannot last forever. This market is already overpriced by national standards (e.g., $1 million for a three-bedroom ranch house).
The median home value is currently around $1.1 million.
Eventually, this real estate market will experience a decline in home prices following a pullback in demand. It’s practically inevitable. But that probably won’t happen in 2021. Recent forecasts for the San Jose housing market suggest that house values will continue to climb over the coming months.
In late-December, the research team at Zillow wrote: “San Jose home values have gone up 15.2% over the past year and Zillow predicts they will rise 12.1% in the next year.”
So we have not one, but two forecasts predicting double-digit price gains in 2021, for this real estate market.
2. Seattle, Washington
Like many of the top-ten housing markets in the Realtor.com outlook, Seattle, Washington has a real supply problem. There just aren’t enough homes listed for sale to satisfy the demand from buyers.
According to a recent report, Seattle had less than a one-month supply of homes for sale as of November 2020. That’s miles below what is considered to be a balanced real estate market, and it gives sellers the upper hand.
Meanwhile, the population for the Seattle-Tacoma-Bellevue metro area continues to grow at a steady pace. U.S. Census Bureau data show that the city’s population grew by a whopping 23.8% from 2010 to 2019. The broader metro area has grown rapidly as well, in recent years.
According to the 2021 housing market forecast published by Realtor.com: “The area’s booming tech scene, high quality of life, and access to both the water and mountains draws a crowd from all over the country.”
The real estate data firm Zillow also issued a strong forecast for the Seattle-area housing market, going into 2021. In December of 2020, they predicted that the city’s median home value would rise by 11.1% over the next year.
Related: Seattle ranks #2 for price growth
3. Boise, Idaho
It doesn’t take a crystal ball to issue a positive prediction for the Boise, Idaho housing market in 2021. With chronically low supply levels and soaring demand from home buyers, the new year will bring more of the same. Rising prices.
Buyers entering the Boise real estate market in 2021 will likely encounter stiff competition, tight supply, and even bidding wars in some cases.
Housing inventory in the Boise area is so low that we had to double-check the numbers. As of early December 2020, this real estate market had less than a 0.5-month supply of homes for sale — one of the lowest levels we’ve seen among U.S. metro areas.
The median home price in Boise rose by nearly 20% over the past year or so. That’s well above average and indicates a red-hot housing market.
The irony here is that many people have moved to Boise for its relatively affordable home prices. But the way things are going, it won’t remain affordable for long. It’s currently following the “Seattle model” — rapid price growth fueled by a serious supply-and-demand gap.
4. Fresno, California
Downtown Fresno Skyline. Photo by J. Mora. (License)
Back in November, we reported that Fresno, California had experienced a major decline in the number of homes for sale.
From November 2019 to November 2020, real estate listings within the Fresno-area housing market declined by a whopping 58%. Talk about shrinkage. As a result, buyers are now competing more fiercely than before, pushing home values upward.
In terms of year-over-year price growth, the Fresno metro area came in at #4 in the Realtor.com housing forecast for 2021.
Fresno also has the distinction of being the most affordable market among the top-five metros on this list. As of December 2020, the median home value in the area was around $280,000. But that median could easily climb above $300,000 before the end of 2021.
As Zillow wrote at the end of 2020: “Fresno home values have gone up 9.6% over the past year and Zillow predicts they will rise 10.4% in the next year.”
5. San Francisco Bay Area
What can we say about the San Franicso Bay Area real estate market that hasn’t been said before. It’s one of the most expensive areas in the country, and it continues to climb.
One trend we’ve seen over the past few months is a “mini-exodus” of folks leaving the city of San Francisco for surrounding (and more suburban) areas. The coronavirus pandemic, and the resulting rise of remote work, are the primary factors driving that trend.
The research team at Realtor.com expects home prices in the San Francisco Bay Area to rise by around 8.4% during 2021, putting it in the #5 spot among the nation’s 100 largest metros.
Disclaimer: This article includes housing market forecasts that were provided by third parties not associated with the publisher. The Home Buying Institute makes no claims about future home prices or other real estate trends. Such predictions are the equivalent of an educated guess.
Good morning, Bay Area. It’s Monday, Jan. 4, and California may raise the bar for new police hires. Here’s what you need to know to start your day.
‘It feels like we’re in the abyss’
January will be a grim month, health experts said.
On the bright side: Two promising vaccines are now available to deliver relief from the relentless pandemic. On the other hand, the pace of vaccination nationally has been slower than expected, and the potentially rapid spread of a mutant strain could produce another wave of infections beyond the holiday surge.
“It feels like we’re in the abyss right now, sinking toward the bottom,” said Dr. John Swartzberg of the UC Berkeley School of Public Health. “We’re not going to sort of get some balance in our lives again until probably sometime in February.”
As the nation’s pandemic death toll surpassed 350,000 on Sunday, intensive care capacity throughout most of California remained hugely stressed. In Bay Area hospitals, available capacity rose Sunday to a still-precarious 8.4%, from 5.1% a day earlier.
• Portrait of a virus: How the perfect pathogen swept the globe and shut down our world.
What’s behind S.F.’s drug overdose crisis?
More than 630 people died of overdoses in San Francisco from January to the end of November, a new record and a staggering increase from 441 in all of 2019. In response to the wave of death, the San Francisco Police Department doubled down on arresting drug dealers in the Tenderloin, particularly those selling fentanyl.
But the added focus has done nothing to stem the wave of death in the neighborhood. It’s a reality that has divided experts on how to address the city’s relentless drug epidemic, which killed more than three times the number of people than COVID-19 in San Francisco in 2020.
• Interactive: These maps reveal where drug overdoses occurred in S.F. in 2020.
New standards for new cops in California?
Should California require its police officers to have more education or life experience before allowing them to join the law enforcement ranks? As a new legislative session approaches, that question has been thrust to the forefront of a debate about what changes state lawmakers should adopt after a summer of protest over police brutality.
Even major law enforcement groups have endorsed the idea of raising the standards for police certification, citing research indicating that more highly educated officers use less force. But competing proposals will test just how far the state is willing to go, especially as concerns mount that the effort could undermine another major goal — diversifying police forces.
UCSF has reached an agreement with the city to boost the housing, transit and jobs programs that are part of its huge Parnassus campus expansion plan — a key step ahead of an approval vote this month.
UCSF will build 1,263 new housing units for students, faculty and staff, which would more than double the school’s entire housing stock in the city. The university wants to build 2 million square feet across new buildings, including a new hospital.
Read more from Roland Li about the plan — one of the largest real estate proposals on the city’s west side in decades, which has drawn opposition from neighbors.
Criminal grand juries have been convened in San Francisco Superior Court only a handful of times in recent years, with prosecutors instead choosing to file charges directly. District Attorney Chesa Boudin has recently begun embracing faster-paced grand jury proceedings in an effort to clear a backlog of cases that’s only grown longer since the pandemic began.
But as Megan Cassidy reports, Boudin’s policy shift is raising concerns among defense attorneys, who, along with their clients, are shut out of grand jury proceedings.
• In the courts: Trump can bar immigrants who can’t afford health insurance, federal judges say. Also: Trump administration can limit food stamp money to poorest Californians, court rules.
• It’s over: 49ers can come home after 26-23 season-ending loss to Seahawks.
‘A mark of transition’
The sign at Cliff House came down on the last day of 2020, marking the permanent end of the San Francisco restaurant and a bitter, if fitting farewell to 2020 — a year full of heart-wrenching closures of beloved institutions.
Dan and Mary Hountalas, who have run the restaurants at the waterfront property since 1973, on Wednesday declined the latest offer of a lease extension from their landlord, the National Park Service. Because they trademarked the name Cliff House, the sign had to come down.
In 15 minutes, workers had unbolted and removed all 10 letters while a crowd of several hundred booed heartily from the sidewalk. “It sucks,” said onlooker Jim Kessler. “What’s going to come here next? Who knows. Today is a mark of transition. The question is, what’s on the other side? For the Cliff House and for us.”
• Brazen break-ins: S.F. restaurant owners say rise in property crime is making dire situation worse.
Bay Briefing is written by Taylor Kate Brown, Anna Buchmann and Kellie Hwang and sent to readers’ email inboxes on weekday mornings. Sign up for the newsletter here, and contact the writers at taylor.brown@sfchronicle.com, anna.buchmann@sfchronicle.com, and kellie.hwang@sfchronicle.com.
SAN FRANCISCO (KGO) — Real estate agent Eli Meyskins with AMSI, says now might be the best time to rent in San Francisco.
One of his listings is one bedroom apartment with a remodeled kitchen and bathroom in San Francisco’s Nob Hill neighborhood. It rents for $2,000 a month. That’s 25 percent less than last year. And, the first month is free. He has two units available in the eight-unit building on Washington Street.
“(They are) 600-650 square feet. Nice, classic San Francisco apartments. In any other given time, they would have been rented immediately,” says Meyskens.
Crystal Chen is an analyst with the rental website Zumper. She says 2020 was a year of unprecedented decline in rents for the Bay Area.
According to Zumper, San Francisco had the biggest drop for a one bedroom apartment in the entire country. Rents are down 23 percent. Oakland is down 19 percent and 15 percent in San Jose.
“Priorities of renters really shifted away from big city amenities, like night life and going out, and towards space and affordability,” explains Chen.
But many predict, renters will start to return to the Bay Area in 2021, especially in cities like San Francisco. Lower rent means those who were priced out before, can afford to move back.
“I have spent the last 10 years having people move from (San Francisco) to Oakland. And just in the last eight months, people are moving from Oakland back to San Francisco. It’s a shift,” says Meyskens.
Chen expects an even bigger shift come this summer, once more people get vaccinated and life starts to get back to “normal.”
“I definitely think there will be people moving back to the city, I don’t think it will be nearly as expensive and crazy as before the pandemic,” says Chen.
On the flip side are current landlords.
The drop in rent prices and with the still large number of vacancies, many are struggling.
The Bay Area Homeowners Network, or BAHN, held a small car rally through San Francisco’s Chinatown to protest California’s eviction moratorium.
Jenny Zhao owns a few condos in the South Bay. She her husband lost his job due to the pandemic. With renters behind on payments, she says her family is suffering.
“We have to pay mortgage, we have maintain, do repairs for the buildings. So, how do we survive?” says Zhao.
She says she understands the plight of many renters given the pandemic, but says there needs to be more equity around legislation.
Despite the difficulties on both sides, Meyskens remains optimistic.
“I think (San Francisco) is going to better in the long run after all this, because it needed a recalibration. For everybody, in the long run, I think it’ll be good,” he says.
Having hit a record high at the end of 2019, the number of apartments and condos now under development in San Francisco (i.e., the city’s housing pipeline) has since dropped 4.6 percent, primarily driven by a sharp decline in the pace of newly proposed projects.
That being said, there are still 9,500 units of housing which are already under construction across the city and should be ready for occupancy within the next year or two, which is down 2.3 percent on a year-over-year basis but roughly 50 percent higher than the average number of units which have been under construction across the city over the past decade.
At the same time, the number of housing units in projects have already been entitled and for which building permits have either been issued, approved or requested – but for which the ground has yet to be broken – has ticked up to nearly 18,000, which is the most in over a decade, while the number of units in projects that have already been approved but not yet permitted (which still includes the majority of the 10,500 units by Candlestick, 7,800 units on Treasure Island and 5,680 units at Parkmerced, projects which have overall timelines measured in decades, not years) has ticked up to 32,900 and is now 7.0 percent higher than at the same time last year.
And with proposals for another 10,200 units of housing under review by the City’s Planning Department, which is the fewest since the fourth quarter of 2014 and down over 35 percent versus the same time last year, San Francisco’s overall Housing Pipeline now totals 70,418 units of housing, which is down 4.7 percent on a year-over-year basis and includes 13,900 units of affordable housing, according to our latest accounting of Planning’s databases as mapped and distributed above.
