A growing return-to-office trend in Silicon Valley looks to be driving a dramatic hike in rents in San Jose, the anchor city of the market.
San Jose placed third nationally on rent in the U.S. for the 30-day period ending June 22, the latest measure taken by Zumper’s National Rent Report. A 19 percent hike put the city’s average monthly rent at $2.570, a 19% hike from a year earlier.
The increase topped the Bay Area, where San Francisco remained the most expensive market, with a monthly average of $3,000, up 7.5 percent from a year earlier. Oakland placed third in the local field at $2,100, a 5 percent gain.
The three cities all placed in the top 10 nationally for monthly rents, with San Francisco second, trailing only New York. San Jose ranked third nationally, and Oakland was 10th, according to the report, which covers 100 cities nationwide, aggregating data from more than 1 million active listings for rental units.
San Jose’s gain––the city overtook Miami and Boston in the 30-day stretch–was attributed to major tech-industry employers calling employees back to the office.
“Workers returning to the area are helping drive up prices,” according to the report.
Several Silicon Valley-based companies––including Google and Apple––recently began requiring their employees return to offices several days a week. A number of big employers in the region have said they plan on having most of their workers in the office in some capacity in coming months, according to a report by CNBC.
Zumper’s report indicated that the red-hot residential market is slowing down nationally. Rents across the U.S. were up 0.5 percent for one-bedrooms and down 2.9 percent for two-bedroom apartments.
A slowdown in the for-sale market could explain the national dips in rents.
“As the housing market begins to cool, price cuts are following and houses are staying on the market for longer periods of time,” the report said. “Most markets have said goodbye to the days of dozens of lavish offers within hours of listing a house. The subsequent price cuts have created pockets of opportunity for renters who’ve been looking to buy a home for years and are a likely explanation for this month’s dramatic decrease in two-bedroom rent prices.”
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