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Bay Area rents drop, but it's not just the pandemic

Louis Hansen, The Mercury News on

Published in Business News

Chuck Hattemer broke his lease in San Jose for temporary and remote shelter during the pandemic.

Hattemer, the co-founder of property management startup Onerent, returned to his parents in San Diego for a rent-free stay.

Last month, Hattemer and his girlfriend, Michelle Lovato, drove to Seattle to live with an aunt and uncle for a few more weeks. On the way, he said, they camped and met several other couples taking the same approach to remote work -- heavily emphasizing "remote."

"A lot of people were on the same journey," Hattemer said in an interview from Seattle. "A lot of people are going remote."

Moves like Hattemer's have contributed to some -- but not all -- of the sharp ups and downs of rents in core Bay Area cities during the COVID-19 pandemic, real estate experts say.

Prices for one-bedrooms in techie hives near major Silicon Valley companies have plummeted from last July: San Francisco fell 11.8 percent, Mountain View dropped 15.1 percent, Menlo Park fell 13.5 percent, San Jose slid 8 percent, and Cupertino 15.7 percent, according to rental website Zumper.

 

And one-bedroom leases in cities with historically cheaper rents and larger spaces have seen rising prices: Oakland jumped 4.5 percent, Walnut Creek edged up 1.3 percent, and Concord rose 2.3 percent, according to Zumper data.

Despite anecdotes about techie friends breaking leases or ditching roommates in San Francisco to hang out in Tahoe, hiking and rock climbing between Zoom calls, economists doubt lifestyle changes are the only reason behind plummeting prices.

Two other big forces have changed the supply-and-demand equation in the housing-short Bay Area: owners of short-term rentals, including Airbnb vacation stops and furnished corporate housing, are now listing those units as long-term rentals, adding new supply. And surveys and interviews suggest many renters are taking shelter-in-place seriously and extending their leases rather than risking a move, quelling demand. The increased supply and falling demand have pushed down prices.

Remote work has made it easier for techies and Silicon Valley professionals to dump roommates, break leases and move to cheaper, bigger apartments in distant suburbs or indulge in lifestyle make-overs.

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