Will rent ever return to normal?

Real Estate

New townhouse complex in Silicon Valley.

SAN FRANCISCO, Calif. (KRON) – It’s hard to say if life will ever feel normal again.

Rent, on the other hand, actually seems to be normalizing, according to Zumper.

A slower pace of rent growth across the United States this month is starting to resemble ‘historical norms,’ according to Zumper’s National Rent Index for November.

Rents typically move in a seasonal pattern, meaning that the rate of change is different during different seasons.

Rent usually increases in the spring and summer, but it drops in the winter, according to Zumper.

November data might indicate that a seasonal pattern is returning, and rent growth will continue to slow down this winter as a result.

From June to September, the month-over-month rise in rent was between 1.6 and 2.2 %, but in November, the median one-bedroom rent rose 0.5% month-over-month.

“One theory of rising rent in 2021 is that rent is catching up to home prices after the historical correlation was broken. At some point, rent will have caught up, achieved a new equilibrium, and will begin to move in sync with each other,” according to Zumper.

Zumper

Rent in San Francisco, however, has remained pretty stagnant. It hasn’t increased or decreased in 4 months, according to Zumper.

Currently, the median 1-bedroom price in San Francisco is listed for $2,800 and 2-bedrooms are listed for  $3,800.

Zumper

San Francisco one-bedroom median rent prices in November 2020 ranked second overall across the country following New York.

According to a Bay Area Metro Report, San Francisco ranked first for most expensive one-bedroom, Mountain View was second with one-bedrooms priced at $2,760, and Palo Alto was third with one-bedrooms priced at $2,750.

Zumper

The graph above shows how the rest of the Bay Area rent has increased of decreased over the past year.

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