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San Francisco, Silicon Valley rents plunge amid downturn

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Re: San Francisco, Silicon Valley rents plunge amid downturn

#121

Post by jedberg »

tedivm wrote: post #104
rootedbox wrote: post #81

Earlier quoted context omitted.

I live on 22 block Valencia.. I've had 4 neighbors move out in the past month. So as far as price.. I can't say. But as far as folks moving out. I can.

My coworkers in Berkeley are all telling their property managers that they need to either lower the rent or they're not going to renew. Once the UC system said they weren't opening back up for physical classes in the fall demand for places near campus dropped considerably. My landlord hasn't lowered rent, but to incentivize us to stay he replaced our washing machine and upgraded some stuff around the property. That b…

> Once the UC system said they weren't opening back up for physical classes in the fall demand for places near campus dropped considerably.

You've been given bad info. The UC President said all campuses will be open in the fall, in a hybrid mode. Berkeley's Chancellor has said that labs will be open with restrictions, but most likely lectures will not.

That of course could change.

One of the properties I manage is in Berkeley. I just renewed the lease in May, but I put in a clause that allows the tenants to cancel if classes are cancelled. They wanted to make sure they had housing secured in case classes came back. I also told them we would reduce the rent in the Fall if necessary.

As a landlord, I'd much rather have renters at a reduced rate than none at all, even if that rent is near zero, just to keep the place occupied to reduce crime.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#122

Post by fullshark »

schnevets wrote: post #96

As a former NYer, I'm hearing stories from friends who got out when offices closed. Many relocated back to their parent's homes (mostly to suburbs in Indianapolis, Cleveland, or NJ) or to family vacation homes (in Maine, Poconos, or Florida). Selfishly, I hope these friends thrive in these new locales, whether that's through remote work or finding new opportunities. I hope they get out of their inflated NYC rents and…

> Selfishly

Not to pick on you cause I agree, but I feel like this is a problem with a lot of analysis of this phenomenon. A lot of people really really really hope this happens and the growth of megacities reverses. WFH/Remote job growth is the mechanism they are counting on because outside the cities there is so little economic dynamism, outside of a few firms in a few locations that are almost the only game in town.

At the end of the day, when this is all over, companies are going to want to have their employees in the office, especially as tech jobs become more and more commoditized. My guess is in five years you're gonna have superstars that built insane resumes the past 15 years living wherever they want but the vast majority of tech jobs will remain in tech hubs.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#123

Post by vmchale »

jedberg wrote: post #73

This 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.

God what a short-sighted policy. Not that I expect rent control to go well but that's nuts.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#124

Post by sokoloff »

akhilcacharya wrote: post #28
Splendor wrote: post #9

> The 9.2% drop in the average one-bedroom San Francisco rent of $3,360 still leaves it unaffordable for the vast majority of city residents. Yeah, that's not much of a drop.

For a 1-bed that's actually $500-700 cheaper than it is in my area (Kendall Sq. in Cambridge).

1-beds in Kendall are $4000/mo?! That’s absolutely insane.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#125

Post by raincom »

onlyrealcuzzo wrote: post #48
DevX101 wrote: post #5

Looks like people are really leaving the Bay Area. you don't see 10-15% price drops in a year without corresponding drop in demand.

As a not small anecdote, I live in a new building in Mountain View -- about 300 units. When I moved in last Summer, there were only 4 units available. It's currently over 50% vacant. My rent was $4300. They're currently renting the same unit on a higher floor for $3500.

Many REITs have scooped all large apartment complexes in the bay area. So, they have been jacking up rents ad infinitum. Now these REITs got their comeuppance. One on Villa St is owned by Avalon Bay $AVB

Re: San Francisco, Silicon Valley rents plunge amid downturn

#126

Post by treis »

silentsea90 wrote: post #52
jcomis wrote: post #14

I 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.

Do you know when the mortgage payment forgiveness for publicly backed mortgages runs until? I heard it was 6 months or 1 year (not sure which). Do we expect a reckoning after this ie. if the economy is still suffering then

It's a year. If things are still bad then it's likely to be extended longer. Especially if the Dems win the election in the fall.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#127

Post by nyc_pizzadev »

FreedomToCreate wrote: post #113

My community has dropped prices 10% and is offering 1 month free (4 year old complex in north san jose). However they are not offering this to current renters whose renewals are coming up. They offered me a 0% increase and when I cited that the 5 other identical apartments are currently available for essentially 20% off (10% discount over 12 months plus one month free), they began been pushing the narrative that the…

Same is happening in NYC. Renewals are either no change or seeing an increase while move ins are seeing discounts. My advice is to move out. You will either get a nice discount somewhere else or force your current landlord to actually compete. When you straight renew you have very little negotiating leverage and landlords know this.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#128

Post by subsubzero »

safog wrote: post #57
RcouF1uZ4gsC wrote: post #53

I expect in the near future, the urban rents in general will fall. Between COVID and rioting, living in a dense city just lost a lost of luster.

You overestimate our cultural attention span :) Anyway, even with COVID + Rioting, I'd much rather live in a big city than in the countryside.

I don't know, these things tend to burn into your memory. Living in the sfbay I am moving out, things that drove me away are numerable. Covid-19, looting/excessive violence w/ riots, and before that a year earlier random power outages due to wind affecting millions (from pg&e), also out of control wildfires burning up large areas of the state. Combining that with the highest taxes in the US and both me and my wife in tech with great salaries but not being able to afford pennisula/sf area(owning a house) makes anywhere but here look amazing.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#129

Post by notyourwork »

BigCatStuff wrote: post #103
notyourwork wrote: post #80

Earlier quoted context omitted.

> 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 inc…

Statewide rent control in California wasn't enacted until January 1, 2020 (with a retroactive period of several months I believe). So, if you rented before Jan 1, and your rental unit was built after 1979, it wasn't covered by any rent control. Landlords could raise rent as much as they wanted on those types of units.

Thanks for clarifying, I wasn't aware this is a recent change.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#130

Post by jedberg »

FreedomToCreate wrote: post #113

My community has dropped prices 10% and is offering 1 month free (4 year old complex in north san jose). However they are not offering this to current renters whose renewals are coming up. They offered me a 0% increase and when I cited that the 5 other identical apartments are currently available for essentially 20% off (10% discount over 12 months plus one month free), they began been pushing the narrative that the…

You're actually in a pretty strong position. Normally to leave a lease you need to give notice, usually 30 days. But there is one time you don't have to do that -- when the lease ends.

If you lease ends on July 1, you can turn in your keys on June 30 and walk away. Your landlord knows this.

Rents won't go back up in July. Even if the economy recovers 100% in the next two weeks, most tech employers in the area are doing WFH until at least the fall if not next year or forever.

If your lease ends on July 1, start looking for a new place now, but don't sign anything. As soon as you find something tell your current landlord that you are about to sign a new lease but you'd much rather not go through the hassle of moving. If they say yes, great, and if they say no, at least you have a new place lined up.

Just make sure you take lots of pictures when you move out because your landlord sounds like the type that will nickel-and-dime you on your deposit.

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