January 2021: Q4 San Francisco Apartment Insider
Looking back at 2020, we experienced the biggest drop in rents since the financial crisis of 2008. Landlords were also subjected to new tenant protection laws around payment of rent and ability to evict…regardless of a tenant’s ability to pay rent (or not). Tough times. But, the reality of rent forbearance has been more of a media story than the actual number of San Francisco renters that requested it. Forbearance numbers are still in the six percent range. That could have easily been dealt with via direct payments to landlords (from government entities) and it would have been likely cheaper than some of the assistance bills that have been passed. As with all things tenant-landlord in San Francisco, politicians like to throw out filet minion when all it takes to fix the problem are hamburgers.
Many of you were prepared to reconcile past due rents with your non-paying tenants on January 31st; possibly exchanging or reducing debt for keys. But, it looks likely that the eviction moratorium order will be extended. As of today, there is no extension on the books, but its certainly coming.
The big story of 2020; rents. In San Francisco, rents are down 27% from March 2020. That puts median rents at $1,992 for a one-bedroom apartment and $2,305 for a two-bedroom. On a positive note, in the last quarter of 2020, vacancies flattened and rent declines slowed, possibly signaling that a rebound is on the horizon in Q1 or Q2. The spring is typically when the rental market heats up, so if the economy improves over the next few months, it's reasonable to expect rents in will start to tick back up.
With the exodus of San Francisco renters, where did they move to? I have some data published by the Postal Service. Although the data is not super robust, it does give more insight to where people are going (as well as where they are departing from in SF). Some data points of interest:
The USPS received 124,131 change of address requests originating in San Francisco zip codes between March and November 2020.Of the 124,131 requests, only 28% were for change of address within SF.
Zip codes with the most change of address requests (in order of # of requests): 94109/Nob Hill - Polk Gulch, 94110/The Mission, 94107/South Park -South Beach - Dogpatch - Potrero and 94103/SOMA.
Top destinations outside of the Bay Area: Las Vegas is number one. Next was Palm Beach County, Seminole County, Denver and Beaverton (Or).
456 SF households relocated to Marin County. The #1 destination was Mill Valley (with an estimated 66% of Marin-bound households) followed by Belvedere-Tiburon, with 14% of households.
There were 608 change requests to San Mateo County, 453 to Alameda County and 44 relocating to Contra Costa County.
U-Haul also released data on migration trends since the pandemic started. In 2019, slightly more U-Haul trucks arrived in San Francisco than left, but in 2020, departures made up a whopping 58% of all one-way U-Haul traffic (from March to June). U-Haul said the numbers likely would have been higher if more trucks had been available to rent. The top destinations for its customers leaving the Bay Area during the pandemic were the Sacramento/Roseville area, Stockton and San Diego. The top out of state destinations were Reno, Las Vegas, Portland, Phoenix and Seattle.
On to the numbers.
