The SF market is extremely differentiated. The market is still tight in many verticals and not hugely changed for any landlord not already on the bleeding edge and pushing higher prices believing them to be reality. The towers are going to have huge vacancy rates since they practice this price “edge game” diligently.
San Francisco, Silicon Valley rents plunge amid downturn
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Re: San Francisco, Silicon Valley rents plunge amid downturn
#72Keep in mind this a thinly traded market, during the pandemic even more so. We're talking about dozens of transactions here.
We're talking about dozens of transactions here.
I think it's bigger than you think.
I read a newspaper article just yesterday which stated that the average annual turnover rate for an apartment complex in the United States is almost 50%.
Re: San Francisco, Silicon Valley rents plunge amid downturn
#73This article seems to be based on only a few transactions, as not a lot of people are actually moving right now.
I manage a couple of properties in the Bay Area, so I keep a close eye on these things. What I'm seeing is not a drop in rents, but an increase in $0 deposits and many weeks of free rent upon move in (sometimes 6+ weeks).
Landlords are very reluctant to lower rents, because with the statewide rent control that limits increases to 5% a year, we're incentivized to keep the rents high and give months of free rent, just so our base rate doesn't drop.
Re: San Francisco, Silicon Valley rents plunge amid downturn
#74Interesting news. I've heard that real estate prices haven't budged much and with the stock market remaining relatively strong, I wonder if we will see a corresponding rebound in rent sometime soon.
I think real estate hasn't really moved because supply and demand moved together. Fewer people moving around means fewer sellers and fewer buyers. Hell, prices could even go up if the number of sellers shrinks by more than the number of buyers shrinks.
Re: San Francisco, Silicon Valley rents plunge amid downturn
#75Earlier quoted context omitted.
> Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs. I've been noticing this as well (I can still find some of them on Airbnb actually). I'm currently in the market for a house, but wondering if waiting a year might be a wise move..
If you're staying in the same market and you already own, then it doesn't matter much. What matters more is that your other investments are relatively outperforming the house (likely already true because of the Fed's money printer). If you don't already own, waiting for a drop might be wise, but if you're going to sell stock to do it, you might wanna do it now. I'm looking at trading up to a new place right now and t…
> if you're going to sell stock to do it, you might wanna do it now
Might be a wise move, but the current interest rates make it hard to pass up a mortgage..
Re: San Francisco, Silicon Valley rents plunge amid downturn
#76I think the reality will set in soon on this once the CARES bonus UI is removed (and if it is not replaced) and the PPP loans run out. Right now everyone I know in real estate is still convinced it was just a minor blip and love to cite cherry picked stats about how a recovery is already under way. Coincidently I have been seeing a lot of fully furnished units coming on the market which I assume were former Airbnbs.
A friend saw 9 move-outs in his building last month, up from a norm of 1. All were AirBNBs.
Re: San Francisco, Silicon Valley rents plunge amid downturn
#77I suspect this is happening in NYC too, but have not seen any data or articles on it.
Re: San Francisco, Silicon Valley rents plunge amid downturn
#78Anyone seeing a similar dip in the NYC metropolitan area? I've been casually watching rents and not seeing much of a dip. It seems that there are less units available as well, so perhaps that is counterbalancing a decrease in demand.
I just asked the same thing below/above. I live in NYC but am currently outside the city and assume we must see a 15% decrease also.
Re: San Francisco, Silicon Valley rents plunge amid downturn
#79so far it seems home prices are still high though. however, the data is kind of unnatural because many are not buying homes right now while many are not listing homes. I'm very interested to see how home prices in markets like seattle, nyc, and sf play out over the next year or so.
House prices are down 8-10%. Rent is down 10-14%. ymmv depending on location.
Re: San Francisco, Silicon Valley rents plunge amid downturn
#80This article seems to be based on only a few transactions, as not a lot of people are actually moving right now. I manage a couple of properties in the Bay Area, so I keep a close eye on these things. What I'm seeing is not a drop in rents, but an increase in $0 deposits and many weeks of free rent upon move in (sometimes 6+ weeks). Landlords are very reluctant to lower rents, because with the statewide rent control…
> Landlords are very reluctant to lower rents, because with the statewide rent control that limits increases to 5% a year, we're incentivized to keep the rents high and give months of free rent, just so our base rate doesn't drop.
How is it that Mission Bay apartments are not subject to these rent control regulations if this is state wide? Asking because when I lived in Mission Bay, UDR properties each year tried increasing my rent much higher than this.