No, Rents Are Not Suddenly Spiking in San Francisco: They Fell Again in July and Are Down 27% since June 2019

The rental market is in turmoil after jobs and people left, and price discovery has set in. Falling rents are a market-based solution to the “Housing Crisis.”

By Wolf Richter for WOLF STREET.

The median asking rent for one-bedroom apartments in San Francisco, after the two highly-hailed-and-touted increases in a row, fell 2.5% in July from June to $2,720, according to Zumper. Since June 2019, the median asking rent has fallen 27%:

There is a peculiar phenomenon in the local media in San Francisco: When rents were spiking a few years ago, they lamented the “Housing Crisis,” where teachers couldn’t afford to live in the City where they taught. And they clamored for subsidies to resolve this situation. Then rents plunged, starting in mid-2019, and instead of praising this as the market-based solution to the Housing Crisis, they painted it as some dark nasty phenomenon that needs to be stopped. This was particularly the case late last year.

And when rents ticked up in May and June for the first time – we’re talking about “asking rents,” a market aspect we’ll get into in a moment – the local media hailed it as the great recovery of San Francisco, though it would worsen the Housing Crisis that they had lamented earlier. And now asking rents fell again…

The rent decline is the market-based solution to the San Francisco Housing Crisis a few years ago. When a place gets too expensive, and the narrative changes as jobs vanish because companies leave, and people leave, then, well, prices adjust. San Francisco has been through this before.

Don’t get me wrong: $2,720 in median asking rent for a one-bedroom apartment is still ludicrously expensive, and it makes San Francisco the most expensive rental city in the US, ahead of New York City, though there are ZIP codes in Manhattan and Los Angeles that have higher rents than the most expensive ZIP code in San Francisco.

So $2,720 in rent, while 27% lower than it was two years ago, is still not a steal.

There are all kinds of data out there – including USPS change-of-address data, population estimates by the California Department of Finance, and labor force data by the California Employment Development Department – that show that the population, including the working population, of San Francisco has declined even as new apartment buildings were completed and added inventory to the market. This changes the dynamics of the market.

The Department of Finance reported in May that San Francisco County’s population, after slowing growth in 2018 and 2019, fell in 2020 by 1.7%, or by 14,800 people, which knocked the population down to 875,010 – the lowest since 2015:

Even as the population fell by 14,800 people in 2020, a total of 4,048 new apartment units were completed and put on the market, according to the Department of Finance. A decline in population combined with an increase in apartment inventory has a salubrious market-based impact on a crazy rental market.

Other measures are the jobs and labor force data from the California EDD. The number of residents in the City with jobs, including jobs outside the City, plunged last spring and has recovered some, but in June was still down by 49,400 people, or by 8.8%, from where it had been in February 2019:

The labor force – residents in the city who are either working or are actively looking for work –plunged in the spring of 2020 and continued to zigzag lower as people were leaving the City until reaching a low point in January 2021.

The labor force has begun zigzagging up, but as of June was still down by 32,400 people from February 2019.

This decline reflects some people who stayed in the city but have retired or quit their jobs or got laid off but are not looking for a job, and it reflects people who left the city. And this too changes the dynamics of the housing market:

Now don’t get me wrong: San Francisco is still an immensely crowded and congested city. It’s just a little less crowded than it was before.

Indications are now that the net-outflow of people – more people leaving than arriving – has run its course. Some people are still leaving, but others are returning, and some new people are being brought in by employers.

Eviction bans are still in place in San Francisco. There are programs under way to use taxpayer funds to pay rents. This further distorts the view of the rental market. Once these eviction bans and landlord subsidies end, there may be another wave of move-outs that may jostle the apartment market further.

This is a market in turmoil. Renters are shopping for cheaper and better places, so there is a lot of churn. Landlords are trying to fill their units. But some cannot compromise too much on their asking rents if they have to toe the line with their lenders. Incentives help overcome this issue.

Then there is this: as rents dropped, some of the people that had shacked up two, three, or four roommates to an apartment, could spread out a little, creating some additional demand for rental units that wasn’t driven by people coming into the city, but was driven internally.

The price discovery with Asking Rents.

“Asking rents” is the rent that landlords advertise on various apartment listing services for their available rental units. Computers gather the asking rents from all major online sites. So “asking rent” here is not survey based, but based on advertised rents.

But asking rent does not indicate what actual rent landlord and tenant finally agreed to, and what incentives this involved such as “two months free” or even “three months free” or “free parking for six months,” or whatever.

If a one-year lease comes with “two months free,” the lease is for 14 months at the price of 12 months, and the monthly “effective rent” just dropped by 14% from the rent in the lease. Incentives have been all the rage in San Francisco. And they’re not reflected in the data.

And asking rents do not indicate if those apartments will be successfully rented out at those rents, or if they will remain vacant.

So asking rents is a measure of price discovery. You put a rental unit on the market at a certain asking rent, perhaps an ambitious asking rent, and if no one shows up, you lower the asking rent.

“Median” asking rent means that half the units on the market were advertised with rents that were higher, and half with rents that were lower.

So the median asking rent is an indication of where landlords hope the market may be, and if incentives are involved, the market is going to be a lot lower. And what we’re seeing in San Francisco is a market that changed dramatically over the past two years, and now landlords are in price discovery mode.

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  84 comments for “No, Rents Are Not Suddenly Spiking in San Francisco: They Fell Again in July and Are Down 27% since June 2019

  1. gametv says:

    This is all part of the new slavery. Financialization of everything means that even though you earn more money, it is eaten up by the basics of life – rent or mortgage, car payment, food, higher education, healthcare.

    Specific industries that are the biggest lobbies in WA DC have created rules that allow their businesses to make absurd profits and make the citizes of the country into the new slaves – always working to keep up but never getting to the point where they could start up a business to actually increase competition for those dominant companies.

    If you are a billionaire, the true danger to your wealth is a competitive environment where your company profits are lowered by having alot more competitors. So you really are fine with higher marginal tax rates on income because it keeps those upper middle class people subservient to their masters – the billionaire class.

    Where is the competition to Google? to Apple? to Facebook?

    • RightNYer says:

      Yeah, people use the fact that Warren Buffett supposedly pays a lower percentage than his secretary as an argument that we should raise taxes on the “working rich” from 37% to 50%.

    • Prue Grubstreet says:

      And the sense of hopelessness it breeds can be fatal. My stepbrother had a doctorate in immunology, did a prestigious post-doc at the Salk Institute, and then got a job at Stanford, where he was working on some supposedly ground-breaking research. But despite all this, he had to live with his much-despised father and stepmother in San Francisco because he couldn’t afford to rent/buy on his own. He was already prone to depression, but the thought that he had achieved so much, yet still was living like a child with his parent despite being in his late 30s was too much. He committed suicide.

      An extreme example, for sure. But the sense of despair that one feels when one works and works yet reaps no reward because everything has been financialized (and you were late to the party) is terrible. I think Durkheim called it “anomie”: “When a social system is in a state of anomie, common values and common meanings are no longer understood or accepted, and new values and meanings have not developed. Such a society produces, in many of its members, psychological states characterized by a sense of futility, lack of purpose, and emotional emptiness and despair. Striving is considered useless, because there is no accepted definition of what is desirable.”

      • Paulo says:

        Pru

        Your example struck a nerve, albeit extreme. It reminded me of this one. My brother in law is a musician at heart. He is an amazing musician. 50 years ago he dropped his music major and went into law because it was ‘the smart thing to do’. He hated being a lawyer but worked at it his entire working life. He did not make the zillions you read about, either. He made a living…a middle class living. When he retired he became a musician. I think he is in 2-3 different bands.

        How many do we hear about who stepped into what they were supposed to do instead of following their heart? Most, I would think.

        I think it was Robin Williams who said his Dad told him to have a backup plan instead of acting. Dad suggested he go into welding. Robin Williams killed himself, too….despite his obvious success.

        When my kids were young I told them the same thing my parents always told me. “You can do anything you set your mind to”. It was the goto phrase in my house growing up. I wonder if they ever saw my crossed fingers?

        • California Bob says:

          Robin Williams was the victim of (undiagnosed) Lewy body disease. From his wife, Susan Schneider Williams:

          “Although not alone, his case was extreme. Not until the coroner’s report, 3 months after his death, would I learn that it was diffuse LBD that took him. All 4 of the doctors I met with afterwards and who had reviewed his records indicated his was one of the worst pathologies they had seen. He had about 40% loss of dopamine neurons and almost no neurons were free of Lewy bodies throughout the entire brain and brainstem.”

        • kitten lopez says:

          first of all, i can’t imagine there’s a working artist –alive or dead–who’d believe Robin Williams’ wife over the reality of success or failure as a born artist/thinker/questioner/odd ball.

          you can dig at his brain matter all you want for an excuse, but as the old saw goes: if you have to ASK… you never even TRIED to afford it understand it.

          our partners often know us the LEAST and there’s a lot of peace in that.

          a lot of successful artists commit suicide (like Rothko) just when they HIT and kill it because they realized they blew the best time of their life trying to court the favor of completely dead boring assholes.

          i’m one of those people. i’ve been lately telling Wolf that i’ve never actually personally seen or heard of someone/ ANYONE actually come back from THAT kinda realization later in life.

          there’s no support for it when you arrive because …they’re ALL assholes where you are.

          that’s why i tapped out in despair. i see myself as a superhero, no modesty HERE, and i realized i tap danced my best years and gave up thrills to write books trying to change the world and bring people WITH me into fun and adventure.

          instead i’ve become unfashionably complicated and unpopular and i spent years ambitiously focused boring and unhealthy to only add to …all THIS?

          ew!

          i cannot assuage your anxieties here that suicides will abate; i’m afraid they will only accelerate. but that’s what i’ve had to make peace with: the necessity of agony rot despair and spilled blood to wake people up and realize We Don’t Want to Play Anymore.

          until then, we can be bought cajoled manipulated and it’s very difficult to co-exist with you all like this.

          i watched “Destry Rides Again” with Marlene Deitrich and those artists banded together to bring Jews out of Germany and they got blacklisted for not ratting on each other. they were part of the war effort, sold war bonds, entertained the troops.

          we “re-tweet.”

          yeah, we’re toast but i’m trying to find the holiness in THAT. how do you do THAT?…

          i don’t know. all i know is that i owe it to those who see me feed me and keep me here.

          like many HERE. we’re co-creating what neither success/nor failure can ruin. this is my new Art.

          we die when we’ve run out of stories to keep us GOING. the stories of “getting the girl” or even “getting a day OFF” are gone, much less forget about “getting a room to oneself.”

          it’s not about women black people or indians anymore. i’m out the race/gender game when we’re out of RELEVANT INSPIRING STORIES.

          i’m still a story teller. hell that’s ALL i am.

          and why i’m here even as i promised James i’d stay OFF the innerwebs because the paucity of truly new exciting fighting ideas is killing me.

          the world is protesting vaccine passports (star armbands) and SF did it quietly, elegantly and everyone’s all for it.

          i long for easy Bad Guys. / no such thing.

          that alone will cause you to off yourself. life is crazy hella complicated and WHY is our dopamine so …dried up and ossified?

          NO FUN. no laying down of bikes in the switchbacks with squishy girls on the back clawing at a man’s back for dear life.

          it’s too SAFE.

          and i have to make peace with this and not off myself or let any industry tell me my life is only worth anything by how much i can make.

          new stories are hard.

          Unamused said we’re not asking THE RIGHT QUESTIONS.

          anyhow… see? not a Money Site, Wolf.

          it’s Existential.

          x

        • NBay says:

          If you REALLY want a real quick better understanding of what Cal Bob wrote (which you probably don’t have and don’t want, unfortunately) just look up the Central Dogma Of Molecular Biology, and Protein Misfolding.

          Then sell ALL your damned money making drug company stocks to at least make them slow this “innovative” shit down a lot, and let the money go to the Bio scientists whose primary focus IS NOT making more of Paul Erlich’s fucking “magic bullets”.

        • 91B20 1stCav (AUS) says:

          Kitten-hang on to that eloquent, fourth-from-last paragraph. That realization and belief is what’s long kept me from gently entering that good night for decades, now…

          Strength to you, my dear.

          may we all find a better day.

      • VintageVNvet says:

        Maybe not so extreme Prue!
        Truly sorry to hear about your relative doing the suicide, but have a couple of my ancestors frustrated as heck who did the same…
        And, IMHO,,, many many talented folks suicide by deliberate ”overdose” of drugs and are not counted as having done it deliberately to keep the official statistics down, and thus avoid the proper responsibility of the guv mint.
        Known a few folks who supposedly ”overdosed” with drugs ow which I knew for sure they were very well acquainted with their personal limits of use through long experience.

        • NBay says:

          Yep, I too think that happens MUCH more often than the people think.

          “The thought of suicide is not a bad thing. It has gotten many a good man through many a bad night”.

          It has for me.

        • NBay says:

          And I’m still sick of “general” government bashing….it’s supposed to be OUR effort at Democracy!
          If you want a REAL set of contradictory, stupid, and fucked up rules, try Abrahamic religions!

          Fuck that musty old desert god!

      • Wisdom Seeker says:

        This isn’t just a US thing, because the credit-based wealth extraction racket is globalized. And you don’t have to be a talented bioscientist or musician to get depressed about it.

        Conservatives/Libertarians have long had a phrase, “Going Galt” (after John Galt from the Atlas Shrugged book) for someone with talent and skill who refused to enrich a corrupt system with the fruits of his labor.

        Now there’s a new, similar Chinese meme – protesting against the system by not participating – which they call “Lying Flat”.

      • 91B20 1stCav (AUS) says:

        Prue-thank you and sincerest condolences in sharing your stepbrother’s experience. Thank you also for the short course in ‘anomie’ (i was familiar with the word, but not with Durkheim). Checking here with Paulo &VVNV and think ‘anomie’ in U.S. (First World?) life has a longer tail than it appears-have had four dear friends two male, two female, pull their switch since 1984 (GG Bridge)-2006 (rode her Tuono off a seacliff)-2010 (firearm)-2019 (hung self). All were smart, artistic, witty and dripping avocational talent, all struggled with the realities of making an avocation pay in a world less-than-ideal.

        may we all find a better day.

      • Prue Grubstreet says:

        Thanks everyone for your kind comments. I do indeed hope we all find a better day and there’s once again room in the world for those who don’t wish to spend all their time engaged in destructive speculation.

      • MrJack says:

        Prue,

        That’s sad and I am sorry for you and your family.

        What’s even sadder, in the collective, is that people don’t educate themself as to the economic realities around them and get angry at the system, rather than turn their anger inward.

        When hedge fund managers and certain other people need an armored car and a team of bodyguards to go to the opera, or anywhere in public with their families, then maybe things will change for the better or will at least stop getting worse.

        The New Deal came to fruition not because of FDR’s and his controllers’ generosity, care and compassion for the American people, but because elite necks were destined for the American equivalent of the guillotine if they didn’t do something, and pronto.

        Same with the G.I. Bill post WWII. Do you think that returning combat veterans would have put up with a return to Depression era employment,housing and educational opportunities?

        • NBay says:

          That last paragraph has been one of my points for a long time. You don’t shit on a people who have spent up to five years doing nothing but destroying and killing (or supporting and encouraging it) and are very damned good at it. You wait for them to die off, then start tightening the “free market” financial screws again.
          Reagan and 1980 was about the right timing.

          Vietnam was an experiment in limited war (because of the A-bomb). War games can only test equipment and techniques so far, you need the real thing. And it made my Uncle and all his pals filthy rich. and destroyed our industrial base, too. All that factory updating/product improving cap-ex just blown to hell or rotting somewhere. The true cost will never be known, but estimates of 2/3 of WW2 are NOT far fetched. Damn, we just wasted ordinance and equipment, and even more kept being produced. “Fire Superiority”….or just playing with all the shit.

          And a lot of dead and fucked up kids, except those who could buy their way out or into the reserves.

          PS; If you want some good Soc reading, try Rieschmann(?)’s “Other Directed” concept. Veblen was first on that train.

  2. Educated but Poor Millennial says:

    Wolf any information for SoCal, please? Particularly for Los Angeles rentals? Thanks.

    • ken says:

      …anything on NYC in this regard?

    • Andy says:

      Van Nuys is cheap. $1395. – 1 bd. 1ba or $1595. 2bd. 1 ba.

      • Educated but Poor Millennial says:

        Thanks Wolf,
        As you can see the rents are falling and you can see in Zillow property history that a lot of properties that now put on sell , the owner have tried to rent and after a while they reduced the rent but no one came forward for such a high rent. Now they decided to sell it. They bought it too high assuming the rent will cover it, Nope, LOL!
        I cant find a chart that I saw before, but it was showing whenever the gap between average house price and average collected rents has gone high, it followed a correction in prices.
        Looking for some good comments from insightful people, thank you.

    • Bull&Bear says:

      I live in Irvine, OC. Rents here are up 20% from November 2020: from $2,500 to $3,000+. I don’t know if rent would go down by the end of the year, but the rental market is extremely hot! As soon as properties come out, you’ll see 4-5 applications on Zillow the same day.

  3. Paulo says:

    Very interesting article.

    I have no understanding of what it is like to have to pay that kind of rent amount? I remember when starting out making ends meet was hard, but working people had roommates by choice, not necessity. Students had roommates, workers did not have to.

    It just shows how wages have stagnated against basic necessities. Stereos and other electronics cheap, everything else has climbed.

    Like the article stated, $2750 is a shitload of money….after tax money to boot.

    • Anthony A. says:

      It’s no wonder engineers and other techs are living in their cars or in tents in San Francisco and other Silicon Valley towns.

      • DawnsEarlyLight says:

        In my college years, I lived in a stretched light blue van, with “IBM” stenciled on the rear and sides. I could park pretty much anywhere I wanted, and was very rarely bothered.

    • Seen it all before, Bob says:

      $2750/month rent is mind boggling to me also.

      However, if you are a new college tech grad and are offered $150K + stock to start at one of the big tech firms, it really isn’t that much different than what I paid when I was young.

      2750*12 = 33K
      33K/150K = 22% of income going to rent.

      I had a 30K starting salary with no stock when I graduated and paid $700/month for my own apartment. That was 28% of income going to rent. Being young and single, it seemed like I still had more money than I knew what to do with. Not anymore.

      I did know a few tech people who had plans to live in their campers in Silicon Valley parking lots for 5 years while stashing away the money saved on not paying rent. 2750*12*5=165K. That would have been a large down payment on a house when they returned to flyover.

      • RightNYer says:

        Yeah, but when you were young, you also didn’t have huge student loan obligations.

        Nor did health care cost $500/month.

      • 2banana says:

        Now do your calculations with take home pay.

      • Educated but Poor Millennial says:

        The entire California work force are not working in tech, a small fraction of the population do.Whole Cali is on fire now. No wonder we see labor shortage in restaurants, construction and lower pay rate levels. They leave the Cali , or find a better paying job to just survive , or just give that rat race up and be free with a tent! ⛺️

    • Old School says:

      My son has been with me for about a year. He was living and teaching in NYC for about 10 years with a net worth other than pension of zero. Since he has been home he has increased net worth about 45K through debt reduction and savings. He probably costs me about $100 / month to be home. He is trying to stretch being out of NYC to two years by teaching on-line, but that will eventually come to an end.

      I think a lot of this is going on and why Congress and the Fed are struggling with a changed economy. In reality, probably 90% of cost could be removed from higher education, but status quo holds on until it is unsustainable.

  4. Catxman says:

    Steve Jobs came from the San Francisco area. He might have been better off inheriting his parents’ home and holding onto the asset until shortly before his death rather than going into the messy, and risky, area of private enterprise and wealth creation …

    • Anthony A. says:

      He would have done better if he went into politics and he also would not have had to use his brain so much.

    • NoPrep says:

      “better off”? Jobs liked what he was doing, he vibed it with uncommon charisma and charm factors, along with drive and work ethic. He got Woz by his side, other people got onto that vibe, the reality distortion field, “insanely great” etc etc, created cultish work teams working his hot stuff..and the rest was history.

      He got off on mess and risk. Made billions doing it. He just wasn’t going to be a normal millionaire next door type of guy. Though Cook seems a lot like that guy.

      Jobs also thought he was an artist, not a mere businessman. I would leave that to Kitten Lopez here to decide if he really was one of those.

      • kitten lopez says:

        Dear NoPrep-
        who am i to say ANYTHING at all whatsoever? i’m just another blowhard, almost 60 (in 6 years but i wanna get used to saying it), and i’m just as surprised confused and lost as when i first got here.

        x

  5. Petunia says:

    With the coming end of unemployment benefits and other moratoriums, rents will not be increasing anywhere. The economy isn’t that great in most of the country regardless of how well off a few may be. That’s my take from the middle of the economy.

    • leanFIRE_Queen says:

      > With the coming end of unemployment benefits and other moratoriums, rents will not be increasing anywhere

      Are they really ending? Delta is going to be pretty high not long from now. Thinking that politicians will only work at looking for more and new excuses to renew “temporary” measures.

      Just like the Fed is doing with QE and ZIRP.

    • cas127 says:

      Pretty much in agreement…you can’t get blood from a stone.

      With maybe 144 million working now vs. 151 million pre C19, it is hard to see too many metros escaping downward pressure on rents.

      Ditto for the impact of tens of billions in C19 moratorium deferred rents…another factor that will introduce downward rent chaos into the system.

      Roommate matching businesses should do well, though…

  6. MCH says:

    Is this the same local media that talks about thefts forcing Walgreens to close stores, Target to reduce hours, the petty crime wave in the Bay Area?

    Well, SF is just fine in the long run, they will go back to complaining about the old problems of teachers not being able to afford rent soon enough. May be then Congress will listen and pass the “Save our Children act”. Or “Protect Our Teacher” act. I like the last one, the acronym is POT. Heheh

    • Wolf Richter says:

      MCH,

      In 2019, Walgreens announced that it would close over 200 stores around the US over the next few years when their leases expire. Then when it closed some stores in SF that were part of the 200, and whose 10-year leases expired, it becomes national braindead clickbait headlines that keep being puked out endlessly.

      One of the stores Walgreens closed was in the North Beach Shopping center which has a Safeway in it and a lot of empty store fronts, and upstairs a dead 24-hr Fitness. When the 10-year lease expired, it closed the store rather than renew. By that time, it had put in a new Walgreens in the remodeled Towers Records Annex building one block from the old Walgreens, and it’s doing fine. That’s how that works. This is near us. There are three other Walgreens a few minutes on foot from our place. Sheesh.

      Then Target decides to change the hours on its stores that are in a high-rise business district — these are small-format convenience-store Targets, not the big-box stores — because there is no one after 6pm and it makes no sense keeping the stores open after 6 pm, especially now with working from home, and suddenly it became twisted braindead national news. Go to these stores after 6pm. That part of San Francisco is empty at that time. It’s totally logical to close those stores at 6pm.

      I wish people wouldn’t regurgitate this braindead garbage here constantly. It just wastes my time.

      • MCH says:

        Sorry Wolf… it wasn’t to point out the closings… it was just the first convenient thing that came to mind in order to point out that the media will do whatever it takes to get eyeballs.

        Barbara boxer mugged!!!! EYEBALL

        End of eviction moratorium will be tons of homeless!!! EYEBALL

        Rent unaffordable for teachers!!! EYEBALL

        Cratering rents bad for everyone!!!! EYEBALL

        You get the idea. I don’t think anyone here believes suddenly there will be no shopping possible in SF. But the media sure loves to drum up the worst image possible in the name of… you guessed it. ?

      • Swamp Creature says:

        Wolf

        This news about Walgreens and Target is being repeated over and over here on the local news channels including WMAL radio. I don;t know why anyone here gives a s$it about what is going on with a drugstore chain and big box retailer 3,000 miles away when we have murders, carjackings, and robberies on a daily basis here and no one is ever apprehended.

        • NBay says:

          Thanks for mentioning that, SC.
          I swear I’ve seen the exact same bunch running out of the Target maybe 5-6 times on SF local TV “News” stations, and explaining it was the hours cutting “reason”. Wasn’t aware they seriously tried the “convenience store” model like Wal-Mart did. (thanks Wolf). Haven’t yet seen the “organized looting” of real convenience stores or fast gas stores.

          Corporate Media is highly dependent on other corporate advertising money….not sure what their mutual agenda is, other than eventually owning everything, I guess.

      • Wisdom Seeker says:

        I love visiting the places that I read about in the media, and finding out that the reality is usually far different than the headline hype. Often there’s a grain of truth, but the contrast between hype and reality is hysterical.

        It’s an excellent immunization against believing all the other media stories!

      • Y says:

        You’re Target analysis is nonsense. There’s always people in stores to handle inventory and deliveries. The marginal cost of keeping a register open is close to zero—except when you factor in theft and safety.

        • Wolf Richter says:

          That’s BS. Inventory restocking is finished by 6 pm, store closes at 6pm, all employees finish up and walk out a little after 6pm, costs go down. There is never just one employee in a store like that. That’s totally nuts. What are you thinking a Target store is? An ice cream stand?

        • NBay says:

          “except when you factor in theft and safety”

          “Crime spree forcing cutbacks at box stores”….right Y?

          Thanks for the immediate feedback on agenda/message.

    • qt says:

      I don’t think anyone here is complaining about rent being too low. Unless you are a SF landlord or speculator, this is good news. I’m glad many of the tech companies there have embraced remote working and are allowing folks to work from anywhere. This should help reduce traffic and overcrowding, and improve the lives of those who remain residents there.

    • Micheal Engel says:

      To muzzle, to discipline, the unruly public school students.

  7. RedRaider says:

    Lot of talk about locking down state economies again. Don’t the states that remain open gain market share at the expense of those that lockdown?

    This will be lockdown #2. Is this just the beginning of 2, 3, 4, 5? Could be massive shifts coming.

    • Wolf Richter says:

      RedRaider,

      Nonsense. Mask recommendations or requirements are NOT lockdowns. There is no talk of locking down. This is sending the unvaccinated to the hospital, not the vaccinated. So be it. This has now become a preventable disease. You don’t lock down an economy because some people refuse to get vaccinated.

      • MCH says:

        The term lockdown has no meaning these days. It’s not as if police are patrolling the streets and throwing anyone they catch outside into jail.

        But now, mask mandates are coming back. CA has indicated that children at school must be masked. Cause of the few rare breakthrough cases.. I know shouldn’t listen to brain dead media, but where else do you get facts from. And Who knows, may be the vaccines become ineffective again with the variant of the month…. As the great Fauci says… time will tell. Ok, I am sure he never said that.. but he should have. ?

      • Old School says:

        The government is in a tough spot promoting vaccines.

        1. It’s still considered classified as experimental.
        2. Vaccine manufacturers have been granted immunity.
        3. There is a government program that is supposed to comp you if you get messed up by a vaccine, but it’s very difficult to get a payout.

        Yes I believe it saves lives, but you can still be rational and not take it. There are ways to keep your circle small for some of us and reduce risk by the 95% the vaccine gives you without the long term unknown risks of the vaccine.

        • OutsideTheBox says:

          So the unknown long term possible risks of the vaccine trump the known long term effects and damage caused by the virus ?

          Yeah….let’s not involve the word rational in weighing the above question.

        • Escierto says:

          All 22 people in my extended family have been vaccinated with Pfizer or Moderna. Aside from some discomfort the next day NO ONE has had any problems. It’s been six months and we are all good.

        • ivanislav says:

          Just FYI, vaccine manufacturers are ALWAYS granted immunity, even on FDA-approved (not just emergency-use-authorization) vaccines. It makes sense though … it’s relatively low profit per dose compared to the potential damages should some unforeseen side effects occur. No pharma company would be stupid enough to develop vaccines without liability protection.

          That said, little research goes into comparing whether vaccines might be causing other developmental problems. One problem (apart from lack of funding) is that it’s hard to find an appropriate control group when essentially the entire country is vaccinated during childhood. If vaccines were leading to higher rates of auto-immunity, or excipients were marginally lowering IQs, we wouldn’t know (not saying that’s happening, just providing examples). Vaccines are a net benefit, but having these studies might indicate that they could and should be improved.

        • Wisdom Seeker says:

          @Escierto: 6 months isn’t long-term. Neither is 18 months.

          We don’t really know the long-term effects of either COVID or the vaccine.

          Superficially COVID seems worse right now, (and I did get the vaccine after careful study), but the media hype has such a strong bias that many people will resist the “hard sell” approach out of prior bad experiences or sheer stubbornness.

          And let’s be honest, there’s a long history of failed medicines and vaccines out there for those willing to look at the historical data. See Wikipedia on “List of withdrawn drugs” for a few hundred significant examples, which represent many millions of people who were potentially victimized by Big-Pharma hype. And many of us know some of those people…

          In the absence of long-term data, individuals have the right to their own opinions and decisions about what to do with their own bodies.

        • Swamp Creature says:

          We took the Trump vaccine. Had no other choice. The VA required it for employment. My Doc recommended taking it. Also I interviewed 40 people who took the vaccine before I did. Everyone said the same thing. One day of discomfort and then everything was OK. Even a doctor on an anti-vaccine Web Site said that if anything were to go wrong t would likely happen in the first 45 days.

      • Swamp Creature says:

        Wolf

        Don’t underestimate the stupidity of the government as they have managed to bungle and politicize nearly every aspect of the virus and the health care of Americans. I give them a grade of “F” so far in handling the virus. Why would you expect anything better in the future?

        • Wolf Richter says:

          Swamp Creature,

          That’s a sad truth.

          At least we’ve got the “Trump vaccines,” enough for everyone, which other countries, including Japan, are now mightily struggling with.

        • Janna says:

          Israel is trying for boosters. There is talk that their vaccine immunity is wearing off. Wonder if we will regret not signing up for some?

        • Swamp Creature says:

          Correction to the record

          In my view the Trump vaccine was the only bright spot in the dismal record of the government’s handling of this virus.

  8. Prue Grubstreet says:

    But meanwhile, in dumpy B-list cities, rents are rising. In my city, which is Boston’s homely but lovable little sister, rents have increased significantly from those who are fleeing Beantown. But wages haven’t gone up, and we haven’t the exciting cultural assets either. So we are paying more to live in a city whose chief attraction was that it was once much cheaper than the big metropolis nearby. Now one has to weigh the benefits of moving to the metropolis where rents are higher, but wages are too (and job opportunities for the educated are legion) or staying in B-list city where rents are now only somewhat lower but good jobs are scarce. Of course, if too many people opt to move to Beantown from B-list city, you’re back to square one — I guess you’re going to get squeezed either way in the end.

  9. Micheal Engel says:

    1) There are about 19 millions vacant home in US.
    2) Chinese, Canadians & Europeans cannot come back, since Mar 2020, because Trump built a wall.
    3) The virus refugees refuse to sell at such depressed prices.
    4) It’s too risky to let a one million dollar property to an unknown, a black box tenant, for low yield, with strong gov tail wind.
    5) Empty property is good enough option to preserve assets. Trouble makers tenants can be “bone in the throat” when u put your property in the market. RE agents prefer properties without tenant’s headaches.
    6) Those with margin call will rent at 30% discount with some
    extras.

  10. Mendocino Coast says:

    Great Post : Shoplifting / the Under $950 misdemeanor Law in S.F. makes no sense except a open door to thieves . Hi rents create a Bad Environment with the topper the Virus Point being people move away from that . A Far Cry from when I worked at Huckleberry House for runaways during the summer of Love 1967 LSD and a large amount of Drugs seemed not to Impact the City at all then but overall in fact those where some of the best times in S.F. One of the Most Beautiful city’s in the USA I think but the times have taken a tole and its everywhere .
    Along Coast up here there are no rentals that listing last more then a day or two . Basically most all the houses sold excepting a Million +Listings and they are moving however like never before. The Locals are hindered somewhat by all the Increased ( Most unmasked ! ) Travelers visiting and some living in there Cars / Camping out and such . These are Not homeless People and many are actively Looking for a Place to live . Housing wanted ad’s are plentiful and for rent are Mostly Nothing .
    Caretaker Jobs used to be easy to get not anymore forget that . As well their are homeless but not a huge amount > Fort Bragg has one of the best Food Banks I have ever seen ! no one is going to be hungry here.
    Most all homes are on at least 1 Acre excepting in town and as such its a great place to live . The 1 Acre is to support Septic per family home’s .
    Its kind of like the Mendo Coast has been rediscovered with it no Freeways clean air and 55 Mile speed Limit .

    • 91B20 1stCav (AUS) says:

      Mendo-mind your population/infrastructure (esp. water and emergency services) tipping point. (Sonoma Coast, meself…).

      may we all find a better day.

  11. jon says:

    7 of my friends and relatives with young kids left Bay Area for Texas as they were completely outpriced .
    They wanted to come down to San Diego but they saw the same craziness.

    • jon says:

      BTW, they could move as their companies allowed them remote work.
      A lot of other folks I know in San Diego are leaving this beautiful place

      • Wolf Richter says:

        jon,

        A young couple I know just moved from SF to Austin. He works remotely for a company in the Bay Area and they let him move. And she got a job in Austin (after she’d been laid off in SF). They left in May.

  12. two beers says:

    In the east side hoods I poke around (Mission, SOMA, Lower Haight, Bernal, etc), there have been some move-ins lately, but some of those were staging. I still see more move-outs than move ins, about three to six times as many, by my daily (albeit small) sampling.

    There are still many parking space moving permits being posted on sidewalks. The reserved dates are much more towards the end of the month when people typically move out, than early in the month when people tend to move in.

    In recent months, the Valencia St U-Haul has been selling more moving boxes than any other U-Haul location in the US. People buy moving boxes when they move out, not in.

    During the boom, when every week saw the arrival of dozens more bright-eyed style-sheet coders, a frequent sight was emptied-out moving boxes stacked against the closest tree, with a “Free” sign taped on it. That sight has been replaced by beds ostensibly abandoned by kids heading back to their old sack at mom and dad’s (although, again, not as many as last year).

    These are just as few of the many items that go into the patented Two Beers’ San Francisco In/Out Moving Index (TBSFIOMI). According to the TBSFIOMI, it looks like SF’s population is still declining, just not at as rapid a pace as last year.

  13. Micheal Engel says:

    The forbidden city crushed China’s tech. KWEB might breach Mar 2020 lows.
    Moderna was down 2.2%, possibly on to close the Jul 15/16 gap, to build a backbone.
    PFE, failed to reach it’s resistance line. PFE might sag to it’s support line : June 2020 to Mar 2021 lows.
    The Olympian might infect Japan. MRNA will bubble will win gold.

  14. Paulo says:

    One thing that would really help with prices everywhere is a break on zoning and building restrictions. If rental and home ownership costs were cheaper in nearby areas, this would even affect the prices in metropolitan areas.

    I have been a long time builder…off and on for close to 50 years. The difference in zoning from when I started in ’73 to now is beyond belief. God help anyone who throws up a basement suite these days. I laugh at the new supposed ‘homeless solutions’, converted C Cans. They start at over 50K for a stackable box. In Vancouver there is a new grant for homeless housing. When they announced the figure I got out the calculator and discovered the cost will be $500K per unit. Crazy.

    I live in a rural, no building inspection area. I built a nice little 440sq ft cottage for under 40K. It was to code, but off the books and everyone’s radar. I put in my own septic system, my own hydro pole, and did the wiring myself…all to code. I had to hire BC Hydro to do the legal connection and also buy a transformer for $1500. The hydro permit was $975. Hydro linemen did the connection for obvious reasons. The well cost just $1500 for everything…well rings, excavation, pump and plumbing. I used renewed cabinets in the kitchen…the siding is board and baten yellow cedar and smart board horizontal. $40 K for everything. My labour was free, of course. I rent it out to my friend for $400 per month and that amount pays for all my insurance and taxes on the property, and for my own home as well. I told him if my taxes go up, his rent will be adjusted to suit. I haven’t raised his rent for 3 years. We’re all happy with the arrangement. The house is insured, and is a legit taxable property with its own address. I use an accountant and save my receipts.

    Now imagine if Joe Schmo was allowed build his own basement suite. Any Joe could throw in a tidy little mortgage helper for under $20K. This would be high end but using your own sweat equity labour. Said homeowner could rent out the suite for $1000 per month, cash….and the renter would be pleased to live there. Over and over this would bring down the rents across the city. All for one extra car parked on the street or driveway, maybe an extra trash bag for collection. An extra 12K per year is darn nice to have and good for all business. Joe the owner now has some fun money for dining out, maybe a vacation every year, or even a car payment. His renter has an affordable and nice place to live.

    If local Govt wants to help with the rental crisis and/or homeless issues, they could so by looking the other way. Taxpayers could insist this happens. The only required inspection regime would be electrical for safety and insurance purposes. Win win win.

    • VintageVNvet says:

      Many places adopting the ADU or accessory dwelling unit zoning these days P, allowing additional unit(s) in the back yard, etc….
      Some places in CA, Berzerkeley that I know of for sure, are adopting zoning that eliminated the SFR type of restrictions.
      Of course the usual NIMBY crowd is screaming, but has been over ruled at least in some places, so far.
      Folks talk about inequality of rent versus wages, and I am reminded of when I was at CAL, paying $50 a month for a very nice studio across the street from campus, and earning $5 per hour doing any job needed, from washing dishes and cleaning apts to painting kitchens with oil based enamels.
      That seemed at the time a fair ratio,,, and I am very sorry for any ambitious young person who tries to work their way through college today when the rent is 50 X and the wages maybe 5 X at best…
      Very unfair to say the least…

    • 91B20 1stCav (AUS) says:

      Paulo-i hear you. Would posit that the domestic favelas are still in their early ‘mobile’ stages, but will eventually coalesce permanently from sheer numbers unless the national will re: the issue progresses beyond the ‘conversation’/’dither-delay’ phase…

      may we all find a better day.

  15. Nickl says:

    rents are still too high.. Does anyone think $2700 a month to rent a one bedroom apartment is reasonable?? A one bedroom apartment is for one person (two at most).. You need to make about $100,000 to qualify to rent an apartment at this price not to mention credit score of at least 620..
    Can anyone who is underemployed just learn to code and become at full stack developer in silicon valley where every company supposedly cannot find workers (even for six figure jobs posted on indeed)?

  16. Udee says:

    I live along the Gulf Coast, not Florida, and while we historically get the Midwest snowbirds, there are now many New Yorkers and other East Coast types buying too. A realtor friend told me last weekend she is also seeing 80 year old widows selling houses to 70 year old widows. It has been tough on the elderly being cut off from family across the country and local friends at the same time. The holdouts now ready to sell.

  17. Yamo says:

    The coward Jerome Powell deserves a big punch in his face….

  18. DR DOOM says:

    The economy was sagging before c19 hit. C19 gave cover for Wall Street to get hosed with fiat. The over spray even hit hillbillies like me. Rents along with the economy will go over a fiscal cliff if the fed doesn’t crank up the pumper and start hosing again. With house prices heading toward an average of .5M
    a run at a 1% mortgages will have to also happen in a desperate attempt to keep the fiat debt balls in the air. Banks will whine to their fed masters but at the end of the day they will shut up and except negative rates. The Fed will soon start feeding us the seed corn.

  19. Memento mori says:

    My tow cents, we are running with zero vacancies on approx 120units in SoCal.
    Some turn over during the pandemic, but as soon as smth becomes available, its gone within a week and rent was increased in average 10%.
    The amount of applications we get is staggering, like more than 80 for a one bedroom within a week.
    If you check zillow rentals there is very little product out there and whatever becomes available is at 10 to 20% more than January this year.
    I dont know how it plays out once eviction moratorium ends in September (I suspect it will be extended for another year as delta variant hysteria starts filling our airwaves) but I can see a situation where a bidding war erupts over rentals, people underestimate the mess government has created and the amount of money out there.
    I hope I will be proven wrong.

  20. BigAl says:

    Wolf,

    You’re missing something.

    Boston is seeing a slight drop in rents right now, too, but it’s because managed apartments are *also* offering 6-month leases instead of 12-month leases. The 6-month leases are actually offering a *lower rent* than the 12-month rent. This, of course, seems totally at odds with the historical norm – but, clearly, the landlords are figuring that rents can only go up from here.

    Given what I have observed in the area since February – it would take a brave man to beg against that.

  21. Micky says:

    Hundreds and soon thousands? of new units being offered on Treasure Islands’ landfill. Also at Hunter’s Point. Got radiation? The Lennar CBOC funded apartment buildings do, built on EPA superfund sites, but promoted by the right people, therefore the beat goes on.

    • Wolf Richter says:

      Micky,

      Just make sure you don’t live on the lower floors and don’t spend too much time walking around on the ground level, and don’t move there if you have kids, and don’t buy your groceries there because they might sit in the store at ground level too long :-]

      This is the kind of thing where San Francisco really shines: corruption up and down and out the wazoo, on a massive scale, involving huge amounts of money and tangled private-sector business schemes, such as the bungled clean-up of these sites. And the San-Francisco-haters here — God bless them! — are fixated on silly shoplifting videos!

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