Stark Contrast in San Francisco, San Jose Rental Applications

SAN FRANCISCO—RentCafe released its 2020 year-end report with data on rent change and renter activity. It looked at 5.8 million actual renter applications nationwide (moving in, out and within a city) and concluded that overall renter activity dropped by 10% compared to 2019. Due to the two-month delay at the beginning of the year, 2020 was also a shorter rental season.

San Jose registered the most surprising boost in renter activity among all the Golden State cities analyzed at 6%. This comes in stark contrast with San Francisco, where the number of renter applications dropped by 7%.

“In May, San Francisco renter activity saw a 22% increase compared to the previous month, followed by a 49% surge in June. The number of rental applications stagnated in July, increased again in August by 18% and started slowing down in September,” Irina Lupa, research analyst and a real estate writer for RentCafe, tells GlobeSt.com. “Looking at the share of Gen Z renter activity in San Francisco this year, the youngest generation of renters or 11% were almost on par with Gen X at 12%.”

Data Points:

Compared to last year, San Francisco rents dropped faster than in all the cities analyzed, by -17.3%, reaching $3,055 per month in November 2020. Meanwhile, San Jose rents dropped by 7.7% y-o-y, reaching $2,531 per month.

Compared to 2019, 55% more renters chose to remain in San Jose (the highest share among all the cities analyzed). Additionally, 14% fewer renters moved out of San Jose and 16% more outside renters applied for an apartment there. These trends indicate that San Jose maintained its appeal, despite COVID issues.

In contrast, of all the cities analyzed, San Francisco registered the steepest drop in applications from outside the city at -31%. San Francisco also lost 11% more renters this year, with Oakland being the first choice for a new home and surprisingly enough, Los Angeles the second choice.

Who were the renters leaving San Francisco? More than half of them were Millennials with a $100,000 median income.

“The number of renters leaving San Francisco for the suburbs increased faster this year, up 24%, than that of renters moving to urban areas, up 6%,” Lupa tells GlobeSt.com. “However, San Franciscans moving to urban destinations still make up a solid majority or 73% of renters on the move. Comparing 2020 to 2019, the income of those leaving or moving to San Francisco registered some interesting changes. In 2020, renters moving out of San Francisco had a $100,000 income, 2% higher than of those leaving the city last year at $98,000. Surprisingly enough, the income of renters moving to San Francisco in 2020 decreased by 15% at $102,000 since last year at $120,000.”