San Francisco, Silicon Valley rents plunge amid downturn • Hacker News Board

Re: San Francisco, Silicon Valley rents plunge amid downturn

#131

Post by stbtrax » Mon, Jun 01, 2020, 5:41 PM UTC

gamblor956 wrote: post #63

cameronbrown wrote: post #43

Earlier quoted context omitted.

Conjecture. AirBnB's are generally below market rate for hotels which brings more people in than you'd have otherwise gotten.

This has not been true in any major market for years, once you factor in all the fees that AirBnB doesn't disclose until you book a listing. Once fees are included, AirBnB is usually more expensive in markets like SF, LA, or NY for individual/couple listings than a comparably furnished hotel room (inclusive of fees).

Have you seen SF hotel rates during convention season? The most basic rooms go for $3-400. Have you tried to book a Paris hotel in summer? In my experience your statement is not true

Re: San Francisco, Silicon Valley rents plunge amid downturn

#132

Post by paul7986 » Mon, Jun 01, 2020, 5:41 PM UTC

Never saw allure of living there..sky high rent, smells of a homeless epidemic like no other I've seen and overall the desire to live in any big city with COVID and riots/protests is even more unappealing! Hopefully all that and remote work pushes many to buy in more suburban and rural areas.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#133

Post by jedberg » Mon, Jun 01, 2020, 5:43 PM UTC

vmchale wrote: post #123

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.

Rent control has a lot of unintended consequences. It is supposed to be a short term band-aid for bad zoning policies, but the zoning policies actually have to be fixed if you want to remove the band-aid.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#134

Post by uxp100 » Mon, Jun 01, 2020, 5:45 PM UTC

tinyhouse wrote: post #116

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.

People without kids aren't gonna move to the suburbs because of viruses/riots. Subrbian life is optimized for families.

Eh, friends in apartment buildings are looking to never live in one again it feels like. IDK how long that will stick. But yeah, they'd be looking to stay in the city, just somewhere with it's own door lol. But unless jobs start moving out too (or widespread remote work becomes both real and pleasant) I can't imagine a large urban exodus.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#135

Post by yalogin » Mon, Jun 01, 2020, 5:46 PM UTC

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…

Its just another way of saying landlords need to incentivize renters. So the market has definitely changed. I feel this is a stopgap measure and that rents must come down eventually. At that point the incentives will stay too.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#136

Post by CydeWeys » Mon, Jun 01, 2020, 5:47 PM UTC

gretch wrote: post #92

Simulacra wrote: post #2

"Rents for a one-bedroom apartment dropped most in the cities richest in high-paying tech jobs, falling 9.4% in San Francisco compared with May of 2019. In Mountain View, home to Google, rents fell 15.9% year over year, while in Apple’s hometown of Cupertino rents dipped 14.3%, according to the rental search engine Zumper. In San Bruno, where YouTube has its offices, rents tumbled 14.9%."

This really doesn’t match my personal experience at all. I live in Mountain View (work at G) and pay 2k for a 1 bedroom (non luxury). Lived here 3 years and pretty happy with it but I checked Craigslist and padmapper last week for some of these supposed 15% rent discounts and found rent to be pretty much the same as pre pandemic. This is anecdata and I’m using human memory to compare rates per location/amenities but…

The 15% drop is in actually signed renewals. The listings you're seeing are the ones that haven't yet caught up with the new market realities (rents seem to be somewhat sticky). These listings are aspirational, and aren't being signed at these levels.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#137

Post by gregwebs » Mon, Jun 01, 2020, 5:49 PM UTC

guenthert wrote: post #51

MajorBee wrote: post #29

Earlier quoted context omitted.

Might also be that people are preferring to not move in the coming months (thanks to COVID-19) and so the units that _are_ on the market simply aren't finding many buyers. I'm actually looking for a new place in the Bay Area next month -- some units have their sticker price uncharacteristically low for sure; many have some kind of specials running too, like first month rent free. I asked a few leasing reps if this is…

No, first month free or similar incentives has been common for at least fifteen years in the Bay Area. It's sadly also not uncommon that the first lease is considerably lower than following ones (for no other reason than the landlord betting on the inertia of the tenant).

First month free has definitely been around at times, but I think less so in the most recent pre-COVID years. This article mentioned we might start seeing 2 months though, which I think is much rarer.

My complex charges existing tenants greater than 5% more than new ones because they know that few people want to go through the pain of moving out. I haven been able to use the obviousness of this to keep negotiating the "new tenant" rate with them.

Re: San Francisco, Silicon Valley rents plunge amid downturn

#138

Post by raincom » Mon, Jun 01, 2020, 5:49 PM UTC

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…

That's the first step, and this has happened many times before. No REIT drops rents; instead, they offer "$0 deposit", "no rent for the first 45 days", etc. Once these tricks are exhausted, rents will drop. The issue is: how long does it take for these tricks to exhaust?

Re: San Francisco, Silicon Valley rents plunge amid downturn

#139

Post by treis » Mon, Jun 01, 2020, 5:49 PM UTC

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.

Long term, sure. But there's little point in paying $$$ for a tiny place when everything is closed due to Covid. Why not decamp for the suburbs/parent's house for a year and save 20-30k?

Re: San Francisco, Silicon Valley rents plunge amid downturn

#140

Post by MAGZine » Mon, Jun 01, 2020, 5:50 PM UTC

The rental market is losing it legs in SF for sure, though landlords are going to try and prop up their values however they can. Like a sibling comment said, giving free months rather than actually adjusting the rate. The funny thing is, they price these free months into the rental rate so it looks cheaper than it is.

Here's some anecdata from my little corner of SF. I know THREE separate homes trying to fill rooms, and it's going awfully. The rent is too high, and there aren't enough people looking for rooms.

My old luxury apartment building has cut rents by around $500 for a two bedroom, about 10% (though I think they're doing it by way of free months).

The luxury building down the street, Duboce, is also offering 2 bedrooms at about $500 off peak. They're also listing their rooms on craigslist.

I rent a flat with two others in San Francisco. They're both leaving the city, and rather than find another apartment, I'm going to leave temporarily too. Funny, the landlord could have just given us a reduction and sign a new lease. Unfortunately, he'll now have to contest for a dwindling pool of applicants or let the place sit empty.