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San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

bloomberg.com

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Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#541

Post by aritraghosh007 »

tristor wrote: post #501

Unsurprising. I don't know why anyone would actually want to live in SFO. Most people live there because they had to for work. Now that they don't, it just makes no rational sense to stay. I'm surprised it's not more, to be honest.

SF isn't an address for close to 800,000 residents just because of tech (or work if you will). There are myriads of other factors of why anyone would choose to live close to nice beaches, a long beautiful Pacific coastline, proximity to wineries/breweries, 4 full seasons w/ unparalleled weather conditions all year round to name just a few :)

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#542

Post by opportune »

lotsofpulp wrote: post #412
opportune wrote: post #383

Earlier quoted context omitted.

I’m honestly surprised so many people put Bay Area/SF food on the same scale as NYC and LA. It only makes sense when you consider top-tier fine dining (like, Michelin star(s)) IMO. For middle-tier dining I think SF and the Bay Area don’t even come close to either of those cities. In fact I think those hip young college towns are much better, in my experience. It’s just that it’s going to be a different set of foods:…

I would say middle tier food in SF is easily better than NYC.

Well, agree to disagree. Personally I've found food in the $15-40 range in NYC to be better executed and be a better value, with more options. I think other cities also blow SF out of the water with execution and value for that price range, but few are able to compete on the diversity of options.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#543

Post by m463 »

acalzycalzy wrote: post #481
burlesona wrote: post #51

I would say the city being “closed” is the major driver. Among my group of ~40 coworkers, about 30 (including me) have left the city. As far as I know all but one were renting. Everyone who left gave the following rationale: - we can work remotely so move wherever or nomad now - SF is not very fun during the pandemic - WFH in my tiny apartment is much less enjoyable than when I was working in the office and didn’t sp…

SF wasn’t fun before the Pandemic. I’ve visited friends who work in tech 3 different times the past 5 years. The city lacks culture, the food and drinking scenes suck, and the people are all the same. (I spend most of my city time in miami, nyc, and montreal)

way better than san jose

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#544

Post by kelnos »

matchbok wrote: post #388
blululu wrote: post #172

Earlier quoted context omitted.

It's not so simple. The newer buildings were constructed at a much higher cost than the old ones and they are priced accordingly (and with less flexibility to go down in price). In spite of the price tag and the 'luxury' appellation, they really are not that nice (they tend to be small and the gym/pool that comes with the apartment is closed during Covid. Consequently there is a subtle structural shortage on apartmen…

The price is mostly the land underneath it. Fancy countertops don't make rent go high.

No, but SF's byzantine planning and approval process jacks up the total cost to build to the point where it doesn't make financial sense to build low-end housing. That means the developer has to increase sale prices in order to turn a profit, which in turn means new landlords need to charge more rent to just break even.

If you consider that a newly constructed 750 sqft 1BR apartment can easily run $800k-$1M, a buyer is looking at $4-5k per month to cover the mortgage, property taxes, insurance, HOA, maintenance, etc. Do you really think a buyer is going to turn around and rent it out for $2k/mo?

For buildings wholly owned by a leasing company, the economics are better, but still not to the point where they're going to rent that out for under $3-4k/mo.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#545

Post by MAGZine »

e9 wrote: post #458
asdff wrote: post #453

Earlier quoted context omitted.

I haven't seen rents really drop in LA either. Commercial landlords would rather let the building go half vacant and try offering 1-2 months of free rent before they drop the base rent.

Yeah it’s weird. I haven’t seen for rent signs before but now I see them on every single building but rents are same. It probably means landlords are basically charging too much and making too much money and not paying enough in taxes(1-2% tax increase per year is probably nothing compared to increases in rent prices)

if you do the math, it's expensive to let a unit sit for more than a couple months as opposed to offering a discount on the rent. This assumes your tenant will turnover in a couple years time, mind you.

I did the math for SF and IIRC ~2mo was equal to a 15% discount. if it sits empty for longer than 2mo, you should have just given the 15% discount. if you let is sit for 2mo AND have to give a 15% discount, now you've really fucked your finances up.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#546

Post by onecommentman »

jdmichal wrote: post #168
leetcrew wrote: post #103

Earlier quoted context omitted.

how would this work? the only way I can think of is for the government to buy above market when prices are going down and then unload them when prices go up. it's hard to see how the public would actually benefit from this. it's a little insane to use government funds to take perfectly good housing stock off the market and prevent people from living in it. seems like the cure would be worse than the disease. imo, it'…

And yet this is exactly what is done for farming: Paying farmers to leave fields fallow in order to maintain supply and thereby pricing. Dropping property prices shouldn't even be an issue for owners. Property value and thereby property taxes should also go down. As long as they can cover that, then they can continue to own the property. Except in reality everyone is actually leveraged against their property and don'…

I propose a moratorium on all analogies using, and discussions on, agricultural practices on any media based in the Bay Area or NYC. Not beating up on these posters. But geez, people...

Our generation is unique in the history of the world in the social and cultural chasm between the vast majority of first-world people and the agricultural systems that generate their food. Practically everything written off-the-top on agricultural sciences and practices by this generation by the average smart person on these sites, although it sounds simple and logical, is somewhere between naive and wrong. A hundred years ago this wasn’t true. It is now.

As analogies, it is not worth the off-topic thread to clarify things.

On actual practices, farmers have better things to do than correct posters on these sites. It’s harvest season for most of them, they have enough problems. Although bean prices are up, so many are smiling...

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#547

Post by MAGZine »

adjkant wrote: post #460
FartyMcFarter wrote: post #457

Earlier quoted context omitted.

The article says NYC rents dropped by 15% which is still significant.

I just added a caveat about that, but many of the top of market neighborhoods people tend to go for here haven't dropped nearly that much (e.g West Village area, Chelsea, UES/UWS). NYC is huge and that drop is not spread equally. Guessing it isn't in SF either, but it seems 31% is going to hit every neighborhood at least a good deal. Edited to add to this, see the spread in June: https://www.renthop.com/studies/nyc/r…

IME, sf has falled 20-30% even in desirable neighbourhoods.

You can get a recently renovated 3 bedroom with laundry and dishwasher, in a desirable area for $4500. Those bedrooms weren't going for less than $2k a year ago.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#548

Post by saghm »

adjkant wrote: post #446
burlesona wrote: post #51

I would say the city being “closed” is the major driver. Among my group of ~40 coworkers, about 30 (including me) have left the city. As far as I know all but one were renting. Everyone who left gave the following rationale: - we can work remotely so move wherever or nomad now - SF is not very fun during the pandemic - WFH in my tiny apartment is much less enjoyable than when I was working in the office and didn’t sp…

What is curious to me is that NYC rents haven't seen the same crater at all (link says 15% but anecdotally most of the desirable top of market neighborhoods aren't budging). I don't buy the "SF is not very fun during the pandemic" rationale as more special than any other notable city, and NYC tends to have less space than SF. To me, that says the SF case has more complexity. IMO, the key factor here is that there app…

I recently moved from Manhattan to outside New York (for reasons mostly unrelated to the pandemic; my roommate decided to move in with his significant other, and I didn't want to pay for a 1 BR in Manhattan). The building we used to live in did officially originally say the rent would be increased for the next year, but when we told them we weren't staying, they pivoted and offered us three extra months for free if we signed on. I'm not sure if this is evidence for or against your statement that rent isn't falling much in New York, but I thought it was an interesting data point.

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#549

Post by kelnos »

tristor wrote: post #501

Unsurprising. I don't know why anyone would actually want to live in SFO. Most people live there because they had to for work. Now that they don't, it just makes no rational sense to stay. I'm surprised it's not more, to be honest.

I've been living in the bay area for 16 years, and SF for the past 10. I love it here, and absolutely would live here regardless of my employer's stance on remote work.

Just because your tastes are different, it doesn't mean most other people agree with you. For some it does make rational sense to stay, and for others rationality isn't the driving force, and there's nothing wrong with that.

(Though I guess you said "SFO". I wouldn't want to live in that airport either.)

Re: San Francisco Apartment Rents Crater Up to 31%, Most in U.S.

#550

Post by mitch3x3 »

v77 wrote: post #214
refurb wrote: post #195

Earlier quoted context omitted.

Very different. San Diego is not a mega city like LA or the great Bay Area. Much better weather than SF, seems a bit more relaxed pace and not as overrun.

Looking at a map there really isn't much of a gap between LA and San Diego. It's pretty much one mega-city.

It’s a 2 hour drive minimum between the two... If they are one big mega-city then Sacramento is part of the bay area.
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