New York Passes San Francisco as the Most Expensive Rental Market

After 18 months of disruption caused by the COVID-19 pandemic, New York has passed San Francisco as the most expensive market in the country with a median one-bedroom rent of $2,810,  according to Zumper. San Francisco’s median is $2,800.

It’s the first time New York has been ahead of San Francisco since Zumper started tracking rental data in 2014.

Rents in both cities were hit by freefalls when the pandemic started. By January 2021, median one-bedroom rent had fallen 23.4% in San Francisco relative to March 2020, and New York’s fell 17.5%.

But since January, rent in New York has returned to near what it was before the pandemic while in San Francisco many of the tech workers who make up a disproportionate share of residents in the city have decided to take advantage of liberal work-at-home policies by employers and stay put.

As a result, rent in San Francisco is down by 20% relative to March 2020 with a decline of only 1.4% in New York.

In general, “unprecedented” rises in rents are happening around the country, Zumper says. Zumper’s national rent index for August has one-bedroom median rent up 9.2% since the second quarter of 2020, and two-bedrooms are up 11%.

Some cities, naturally, are seeing higher increases than others. For example, after a number of tech companies relocated or opened offices there after the pandemic, the Austin metro area has become hotter for renters with rents surging along with the popularity. Zumper notes Austin’s home sales market is currently the hottest and most competitive in the country, which is trickling down to rental markets in the area.

The rent spike has become particularly acute in the suburbs with Round Rock up 17.1% year-over-year for a one-bedroom, and 16.8% in Pflugerville.

“With Austin getting even more competitive, it’s reasonable to expect rent to accelerate as more renters get priced out of buying a home,” Zumper says.