The price of renting a one-bedroom apartment in San Francisco has dropped for the second month in a row, CNBC reports.
According to data from apartment rental platform Zumper, rental rates are down 12% year over year in June.
That is the largest decline in the country and a record slip for San Francisco rent prices, according to Zumper.
"Zumper has been tracking rent prices across the country for over 5 years, but we have never seen the market fluctuate quite like this," Zumper co-founder and CEO Anthemos Georgiades said. "For example, rent prices in San Francisco have historically only gone up and typically only incrementally, yet now we are seeing double-digit percent rent reductions. This is unprecedented for this generation of renters."
Georgiades told CNBC the numbers reflect pricing since tech companies like Twitter and Facebook told employees they can work remote permanently.
Rental rates dropped for two consecutive months in San Francisco based on 9,000 listings that Zumper analyzed.
Zumper found the median rental price for a one-bedroom apartment in San Francisco fell 11.8% year over year, from $3,720 to $3,280. In May, the drop was 9%.
The average cost to rent an apartment in the country was $1,229 per month in June.
Because workers are not tied to a city anymore, Georgiades said the city's real estate market is quickly changing.
He said tech employees can now look "outside of dense metropolitan areas for their next home now that their commute time is no longer a factor."
He said the dip in rental rates is due to "pandemic pricing," adding "unprecedented number of Americans are unemployed and landlords are having to adjust to this in their rent renewals or vacancy price asks."
An economist at Redfin told CNBC that lower rents can also impact potential homebuyers in San Francisco.
"If rents continue to decline in the city, we could also see some landlords opting to sell and would-be buyers deciding to continue renting," said Schery Bokhari, who also noted the inventory of homes for sale in San Francisco is up 18% year over year.
"The jump in inventory in San Francisco may indicate less desire for homes in the expensive urban center as buyers envision a permanent shift towards remote work and seek out larger homes and affordability further from the city," Bokhari said.
Zumper also found rental prices in markets just outside major metropolitan areas are up. Some examples include Providence, Rhode Island, and Sacramento, California, where rental prices are up about 5%.
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