San Francisco has always been an expensive city to live in. Apartment rental prices are on average the highest in the USA and even though real estate agents have reported a reduction in rental prices over the Coronavirus pandemic, the cost of accommodation remain high.
In recent months, the average price of rental accommodation has dropped by 24% but with the average one bedroom apartment still commanding rents of around $2,660 pcm, it is hard to see just how people can afford to live in this area.
In many cases, residents are voting with their feet and moving out of the city. It makes sense. After all if you are working from home, why bother paying through the nose for a tiny apartment because it is convenient for work, if you can no longer even get into your office?
However despite the already high cost of real estate and the fact that many people are leaving the city in droves, this does not seem to have had an impact on real estate prices.
So why is San Francisco so expensive?
According to San Francisco real estate agents, property prices are still high. And this is because despite everything, many people still want to live in San Francisco and plenty of prospective buyers have the budget to match.
There is no shortage of luxury homes for sale in San Francisco. This has to be one of the few cities in the world where you can find homes advertised as affordable if they cost less than one million dollars.
However if you want to know why is San Francisco so expensive you need to look at the businesses and companies operating in the area.
San Francisco – one of the wealthiest cities in the world
San Francisco is one of the wealthiest cities in the world. The high cost of living is due to the booming tech industry and the proximity of Silicon Valley and with many of these companies expected to go public in 2021, it seems that real estate prices will go through the roof!
According to real estate professionals, Silicon Valley expansion could mean that the prices for luxury real estate in the popular Bay Area will rise even further in 2021.
So Why is San Francisco So Expensive (And are Real Estate Prices Expected to Drop in 2021?)
Not everyone who lives and works in San Francisco is a multi millionaire in the tech industry. Many people are going through hard times right now and this has had a slight effect on the lower end of the property market and in the rental market.
So it seems that the cheaper homes and rental properties will continue to experience a drop in prices. And although real estate prices are still higher in San Francisco than in other city in America, it will make the cost of accommodation slightly cheaper than it was a pre pandemic.
For the top end of the market, it seems unlikely that prices will drop in 2021, thanks to a booming economy fuelled by the tech industry and the fact that so many people dream of making their home in San Francisco.