In most of the country, rent prices are skyrocketing thanks to a red-hot housing market and a record-high rate of inflation. But in a handful of tech hubs, rent is actually lower than it was at the onset of the pandemic.
A new report from Realtor.com found that median rent prices in San Francisco for small apartments — studios and one-bedrooms — are lower than they were in March 2020 by 13% and 3.3%, respectively. In San Jose, rents for studios, one-bedrooms and two-bedrooms are all lower than they were before the pandemic (by 2.8% for studios, 0.6% for one-bedrooms and 1.1% for two-bedrooms).
It's not just California cities that have seen rent prices decrease for small apartments. In Chicago, the median rent for a studio apartment is 10.4% lower than it was in March 2020, and in Washington D.C., studios are renting for 0.7% less than they did two years ago.
For the most part, housing prices in the U.S. have soared for buyers and renters alike during the pandemic. Yet the rise of remote jobs has led many workers to flee high-priced cities in favor of less crowded, cheaper and more relaxed places to live. And that's led to a decline in rent prices in some cities.
It's also worth noting that even though rent for some apartments is below pre-pandemic levels in these four cities, they're hardly cheap places to live. The median rent in San Francisco is $2,982, according to Realtor.com. In Chicago, it's $1,856.
Meanwhile, median rents in the country as a whole are up 19.3% over the past two years according to Realtor.com’s data. In some popular cities like Miami, Austin and Las Vegas, prices have risen even faster over the last year.
Why is rent getting cheaper in San Francisco?
Realtor.com’s report points out that while rent prices in tech hubs including San Francisco, San Jose, Seattle, Chicago and a handful of other major cities are on the rise again after bottoming out last April, growth is trailing the national rate by more than 9 percentage points.
That suggests that many renters “continue to prefer to live in other, cheaper parts of the country,” the report says. That preference is likely thanks in part to the flexibility afforded by the remote work policies and shifts in work attitudes that drew workers out of big cities in the early days of the crisis.