In the battle of soaring rent prices, it seems that we have a winner. According to The Real Deal, New York City is now the city with the highest rent prices in the United States, a crown under which San Francisco reigned since 2014.
It was a close call, considering that San Francisco’s average one-bedroom rent in 2019 was $800 more expensive than New York City’s. Because of new tech firms in the city, high-wage workers had high apartment budgets to spend, and prices rose accordingly.
Both the Bay Area and NYC real estate markets were hit hard by the COVID-19 pandemic, and rents fell drastically across the country, but the hopeful, post-pandemic and post-vaccination New York has been increasingly popular over the summer.
Statistics show that families, college students and workers began looking for an apartment in the Big Apple, which consequently sent rent prices soaring. Although the average is yet to reach the pre-pandemic price, it has recovered more than San Francisco’s market.
According to apartment listing website Zumper, the average price for a one-bedroom apartment in New York was priced at $2,810 per month in August. San Francisco’s was slightly lower, with similar apartments averaging $2,800 per month.
StreetEasy economist Nancy Wu, quoted in The Real Deal, believes the rise will continue in the city, even if at a slower pace. The Delta variant currently prevents rent prices from rising drastically, and rentals remain lower in price than pre-pandemic figures.
However, StreetEasy shows that rent prices are on the rise in the East Village, Nolita, Flatiron, the Financial District, Downtown Brooklyn and more.
The slow but steady rise is a result of colleges reopening to welcome students, new jobs and federal stimulus dollars.
Prices are not rising as significantly in the Bay Area because the same technology companies that contributed to the exorbitant rent prices in San Francisco have maintained their work-from-home system, capping demand.
Despite being the second-most active market according to listing website RENTCafé, people who are looking for houses do not have as much money to spend as they did during pre-pandemic times.
Jeff Andrews authored the Zumper report, and he believes San Francisco rent will remain capped as a result of the Delta variant and work-from-home policy.
“For tech companies in San Francisco that do plan on having an office, those workers can continue to live outside of the city,” Andrews is quoted. “Which will likely put a ceiling on how much rent will rise.”
Read more about the Zumper report and the state of SF and NYC rental markets in The Real Deal.