After jump, rents start to go down in San Mateo County

Redwood City’s average one-bedroom rental unit fell from $2,900 a month to $2,790 a month, from October to November, but that comes amid a substantial growth in the past year — 25.5%.

Last month’s state median for a one-bedroom rental unit was $2,076 a month. The highest-ranked prices in the state are in San Francisco at $3,000 a month. Redwood City ranked fourth at $2,790. And San Mateo ranked fifth at $2,730 a month, a growth of 14.7%, according to Zumper, an online rental platform.

An expert predicts now is the time for a discount if tenants are looking to move. Zumper spokesperson Crystal Chen believes rentals during the next few winter months will be the cheapest they will be for the next year. There are a variety of factors why, she added.

“Nationally, prices for one and two bedrooms are trending down. Factoring inflation, high-interest rates and recession fears are causing people to hold off on making any big economic decisions,” Chen said.

In November of last year, the median rents for both one- and two-bedroom units nationwide grew by more than 12%. However, this November, prices grew by less than 9%, a 3% decrease, according to Zumper.

But the Bay Area’s housing market is unique compared to the rest of the nation. Local rents this year have maintained some of the most expensive areas to live in California and the country, but September to October’s data shows rents are now beginning to trend down. San Mateo’s one-bedroom rent decreased by 6.1%. And Redwood City’s two-bedroom units decreased by 3.4%. In the following month’s report, from October to November, San Mateo’s one and two bedrooms decreased an additional .5%, not much, but the decline has sustained for the two-month period. For Redwood City, both one- and two-bedroom units saw a decrease by 3.8%, another steady decline, according to Zumper.

When looking at the data, Chen added any percentage change around 5% or more is significant. It’s a prime area in which to live, the demand is always going to be high and there isn’t much room to build more, she added.

“Inventory is low and you might not have the luxury of picking every amenity you want, but now is the time you will find a discounted price. And prices will be at their cheapest during the winter months as landlords look to fill vacancies before the holidays,” Chen said.

However, Evelyn Stivers, executive director for the Housing Leadership Council of San Mateo County, believes the data doesn’t necessarily reflect renters’ perception.

“We are still getting emails about people’s rents going up for individuals, so it doesn’t feel like that,” Stivers said, who added that the scarcity for homes gives the landlords leverage to get more out of their renter.

The HLC of San Mateo County is a nonprofit dedicated to community support for housing, and advocates for policies that address the root causes of the housing shortage.

Stivers argues that to make a real difference in people’s lives, cities here will need to work harder at making more affordable housing.

“The one thing that is important for people to know is that as other costs increase people who are spending half or more of their income on housing are really feeling the pinch right now,” Stivers said.

Still, the rental market could be flat to slightly down this next year, predicts Ektra Real Estate Realtor Chuck Gillooley Jr.

The market could soon be flooded with rentals due to sellers who have taken their homes off the market and are turning to rent their units out until the housing market trends back up, he said.

“I think it is going to mirror the economy and anybody who is an economic expert, which I’m not, says we are in for a bumpy year, forecasting the next year rates are up and stocks down,” Gillooley Jr. said. “And I can’t see rents going up a lot if people aren’t moving.”

If landlords are stuck with vacated units for 60 to 90 days it might force their hand to drop their prices and, with less competition, it’s possible the prices continue to trend down, Gillooley Jr. said.

“The young professionals who have money will flock toward modern places. I wouldn’t be surprised that the market sustains, while the older single-family residence rental prices face reductions after sitting for months, Gillooley Jr. said.

The newer modern homes will remain competitive and won’t be under the price pressure that a lot of the older outdated housing inventory is on the Peninsula, he added.