Like other parts of the Bay Area, median rental prices in many San Mateo County jurisdictions have stabilized or dropped since last year, which some industry experts attribute to ubiquitous layoffs forcing residents to move, as well as the end of pandemic-related eviction moratoriums and relief.
According to Zillow, median rent in San Mateo across all property types decreased about 4% between last January and this month so far. Redwood City and San Bruno have also seen 5% and 16% decreases over the same time period, respectively, although South San Francisco bucked the trend with a 4% increase. The general trend also mirrors state and national patterns, which have also seen decreases since last year.
Michael Pierce, president of Prodesse Property Group, a property management firm operating throughout San Mateo, Santa Clara and Santa Cruz counties, said he’s noticed a dip in rent prices across his company’s San Mateo County properties. A large part of that is a result of lowered occupancy rates throughout 2023, which forced a reduction in tenants’ monthly rents or other concessions, he said. Prodesses’ net occupancy rate – which factors in concessions as well as gross physical occupancy figures – decreased slightly from December 2022 to last December.
“Our occupancy is higher than they probably should have been through COVID because of all the mandates. There was some subsidy money coming in from the government, but also owners were forced to allow people to live in their properties, even if they couldn’t pay rent,” he said. “Occupancy wouldn’t have been that high had it been a normal market. I think rents were artificially higher in 2022.”
The eviction moratorium ended about halfway through 2022, and without such bans in place last year, massive layoffs in the technology sector forced many residents to move in with their families or move out of the area entirely.
But over the last several months, Pierce has seen occupancy steadily inch upwards, which he attributes partially to the fact that, due to sky-high interest rates last year, individuals and families who otherwise would’ve moved out to buy a house are just staying put. The company’s internal data showed that about 4% of their move-outs were related to home purchases, which Pierce said usually hovers between 10% to 12%.
The collective pause on house hunting at least partially offsets the tenants who are moving out to live with roommates or family, and increased back-to-office employers mandates also help keep occupancy afloat.
“Our internal forecast for 2024 is that it’ll be a moderately better year. We see that stabilizing because it looks like more and more we’re not going to have a recession and things are kind of settling down,” Pierce said.
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