Rental market returning to pre-pandemic levels but not in all metro areas

SAN FRANCISCO -- All of the major metropolitan areas in the country have seen rent prices jump back to pre-pandemic pricing levels, except for one.

If you guessed San Francisco, you guessed right.

While still by no means or definition cheap, the cost of rent in San Francisco has still not returned to what it was in March of 2020 with a median one-bedroom rent of $2,995. 

"We're actually the last place that hasn't fully rebounded. If we look at all of the major metropolitan areas across the country," said Rob Warnock, senior research associate for Apartment List. "Last month it was San Francisco and San Jose where rent prices were still slightly below where they were at the start of the pandemic."

As of June, San Jose rental prices are back to normal. San Francisco rent is still 2.5% off what it was. In Manhattan, monthly rent has reached new stratospheric highs.

Warnock attributes the lack of bounce back to two things, the 6.7% population dip San Francisco faced early on in the pandemic and this: "San Francisco has the highest concentration of remote capable jobs."

Those remote jobs and limited in-office requirements may have changed neighborhood preferences. The north side of San Francisco, previously undesirable for folks commuting to Silicon Valley - particularly in Pacific Heights, Cow Hollow, and the Marina - have gone back to the old ways of apartment competition.

"There are bidding wars for properties that have a few different types of characteristics; if they have a patio or a balcony or a yard or an outdoor area," said Lisa McCarrel with Move Bay Area. 

Look to the shiny new skyscrapers dotting Mid-Market, the East Cut, Hayes Valley and the Van Ness corridor. McCarrel said what may have felt claustrophobic during the pandemic has price negotiation potential now. 

"Condos in that neighborhood flew off the market in a day and now they sit on the market longer," McCarrel said. "There can be negotiation on the prices - whereas in 2019 that just wasn't possible."