San Mateo County’s rental market showing signs of rebound

San Francisco is the leading local indicator of the market’s new direction, according to the Apartmentlist report that claimed February’s rental price increase was the first such hike in the city over the past year.

“Rents in San Francisco are down by 26% year over year, and while prices are far from returning to pre-pandemic levels, we appear to have hit the turning point where the city’s price correction has officially bottomed out,” said the report. “In February, rents in San Francisco increased by 1.2%. This is the first monthly increase in San Francisco since the start of the pandemic.”

Rents in San Mateo have followed a similar pattern, according to Apartment figures showing the city’s median price dropping by 17% over the year, but ticking up incrementally by .4% over the month. And even with the falling prices, February’s rents remain high in San Mateo where the asking price for a one-bedroom unit was $2,048 per month and it was $2,781 for a two-bedroom unit.

Similar fluctuations are observed on the national rent market too, according to the reports suggesting prices reached their nadir last year.

Apartmentlist claimed the national market saw a .7% rent index uptick over the past couple months, which amounted to the largest gain since June 2019 when the rental industry was in its full summer swing.

The Zumper report further detailed the changing dynamics of the nation’s rental scene.

“2020 brought unprecedented shifts in the rental market, largely stemming from migration shifts brought on by the COVID-19 pandemic,” said the Zumper report. “Two months into 2021, we’re seeing clear signs that these trends have plateaued, or even slightly reversed.”

Regarding the referenced migration patterns, industry experts suggested many apartment dwellers abandoned their dense living conditions during the pandemic in favor of more spacious locales.

Some have said the emerging preferences bolstered the home sales market, which locally over the last year saw rising prices once the shelter-in-place order was lifted.

The local sales market was further fortified locally due to a surge in first-time homebuyers, according to real estate authority CoreLogic, which found San Mateo County saw a 12% jump in 2020.

The county’s bounce in first-time homebuyers is tied for the second largest in the nation, matched with Alameda County and trailing the national leader Marin County by 1%, according to the report.

San Francisco’s 11% uptick in first-time homebuyers tied with counties in Arkansas and Massachusetts for the third largest national gains, establishing the Bay Area as the nation’s most popular region for such investments.

Beyond sensitivities regarding health hazards motivating property purchases, the CoreLogic report further cited favorable lending conditions and a desire to settle down among millennials as reasons for the uptick in first-time homebuyers.

“The wave of first-time buyers was imminent irrespective of the pandemic as the largest cohort of millennials were settling down and approaching the median first-time home buying age of 32,” said the report.

Remote work arrangements and a faltering economy also played a critical role in disrupting the rental market, noted the Apartmentlist report, which simultaneously tracked rebounding prices in traditionally expensive markets and slowed growth in areas experiencing a boom during the pandemic.

And with the market beginning to shift course, the Apartmentlist report anticipated further evolution over the coming year.

“While remote work and economic fallout of the pandemic will undoubtedly continue to impact local rental markets going forward, the way that these trends continue to play out may now start to become more nuanced and gradual,” said the report.

austin@smdailyjournal.com