Bay Area rents expected to rise as regional economy rebounds

SAN FRANCISCO, CA - JAN. 14: Mykhailo Achey, an IT consultant who moved into better housing in San Francisco, Calif. during the pandemic, takes in the balcony view from his downtown highrise, Thursday, Jan. 14, 2021. (Karl Mondon/Bay Area News Group)

Bay Area rents appear poised to slowly rise again as the region’s economy continues to recover from the worst of the pandemic’s downturn.

Although the average monthly rent in the Bay Area is expected to drop by about 1.7 percent for 2021, that is a “significantly more moderate” rate than at the height of the COVID-19 health crisis, according to a report from Yardi Matrix, a national real estate market research company.

The region’s sub-markets experienced large rent decreases on a year-over-year basis in 2020, with San Francisco prices dipping by 9.4 percent and San Jose’s dropping by 13.7 percent.

Together with New York, which saw an 11.7 percent overall decrease, those two Bay Area cities experienced some the largest rent price decreases in the country, according to the report.

As rents plummeted, landlords were making concessions to keep or attract tenants, said Doug Ressler, Business Intelligence manager for Yardi Matrix.

The Bay Area rental market is likely to experience price increases in the coming months as regional economic conditions improve, according to data from, Yardi Matrix, a national real estate market research company.

“We’ve seen a lot of concessions and a lot of people making minor, minor migrations to be able to take larger unit sizes in the exurbs,” Ressler said. “We think that trend is going to begin to reverse.”

As the economy gets back on track, the region’s underlying rental market conditions are expected to result in price increases over the next year or so.

“There is lot of demand chasing low supply and that is going to drive prices up,” Ressler said.

For 2022, Yardi projects rents could rise in the East Bay by 5.4 percent, in the South Bay by 7 percent and in San Francisco by 6.3 percent.  

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