Historically hot housing markets may be feeling a little under the weather amid the pandemic which is seemingly pushing down real estate prices throughout the Bay Area, according to recent reports.
Rent costs are down in San Mateo, Redwood City, San Bruno, South San Francisco and other Bay Area locales from the year prior, according to a June report from rental marketplace Zumper.
The price reductions are in line with trends across the nation which largely show costs dipping from the year before and asking prices dropping on a monthly basis.
While local costs remain significantly higher than the rest of the country, some experts are questioning whether the economic chaos brought by COVID-19 could yield greater affordability.
“The fact that we’re seeing rents decrease at a time when growth normally speeds up is reflective of the continued uncertainty and economic fallout of the COVID-19 pandemic,” said Chris Salviati, analyst with online database Apartmentlist, in a report tracking dropping prices across the nation.
Dipping prices start in San Francisco, according to a local Apartmentlist report in June which show the city’s rents declined 0.7% in the past month, while dropping moderately by 1% from the same time last year. The cost reductions are the second consecutive month over which San Francisco has grown less expensive, according to the report.
The reductions are trickling down the Peninsula, according to Zumper, which shows San Mateo’s one-bedroom rent of $2,600 is down about 2% from the year prior. Similarly, one-bedroom units in Redwood City were renting for $3,000, which is down marginally by .3% from the year prior.
In San Bruno, where one-bedroom rents hit about $2,980, costs dropped nearly 15% from the year prior. And one-bedroom units rents in South San Francisco ticked up 4% from the year prior, but saw decreases from the month before and two-bedroom units are less expensive than the month or year before.
Critics of online databases frequently claim the rents cited are too high, and are unrepresentative of the experience for local apartment seekers. In recognition of those claims, websites often note reports only survey market-rate properties and exclude those reserved as affordable.
There is often discrepancy among the prices listed on the sites as well. For perspective, San Mateo’s one-bedroom rents are more expensive on the Apartmentlist database, which shows costs went down over the month but ticked up marginally from the year prior.
Real estate sales company Compass confirms that the pandemic and resulting shutdown dampened the seasonal housing market though, according to a report showing sales prices dipping as well.
Median housing sales prices in San Mateo County dropped from $1.76 million in May last year to $1.64 million to the same time this year, marking the only instance this year in which costs were reduced from 2019.
“May, which is typically among the best-selling months of the year, remains well below May 2019,” said the report, which also showed the amount of available listings dipping once the shelter-in-place order was first announced and rebounding as restrictions loosened.
Similarly, house-hunting website Zillow shows the county’s market turning in favor of buyers while projecting that prices will continue to decline over the rest of the year.
The Compass report is more optimistic, suggesting the sales market is prepared to rebound with an economy that shows resiliency.
“With the easing of shelter-in-place as well as the market learning to adjust to new circumstances, it is expected the recovery will continue to surge closer to normal,” said the report.
For rents, Salviati suggested it is yet to be seen the lasting repercussions of the shutdown and the economy’s response will ultimately determine future tenant costs.
“As far as longer-term impacts, the pandemic’s effect on rent prices will depend heavily on how quickly the economy is able to recover,” he said.
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