[Asia Economy Reporter Kwon Jae-hee] Apartment rents in San Francisco, which boasted high rents due to the 'Silicon Valley effect,' are plummeting.
On the 8th (local time), Bloomberg News, citing rental survey firm Realtor.com, reported that last month, the rent for a studio apartment in San Francisco fell 35% year-on-year to $2,100.
It is analyzed that rents declined as people left cities with high rents due to the spread of remote work amid the COVID-19 pandemic.
In particular, technology companies have established remote work as a norm due to COVID-19, which has further influenced the decline in rents in the San Francisco area.
Some companies are showing signs of downsizing office space, which is interpreted as a signal that the rent decline is not a temporary phenomenon caused by COVID-19.
According to office building information firm CBRE, as of last month, the office vacancy rate in San Francisco was 8.3% this year, doubling compared to the same month last year.
Earlier this year, Pinterest canceled its downtown office lease, citing "rethinking where future employees can be based."
Hewlett Packard Enterprise (HPE), a mainstay of Silicon Valley, also announced on the 1st that it will leave its headquarters in San Jose, California, and relocate to Houston, Texas. This move was made as remote work spread due to the COVID-19 pandemic.
Local media evaluate HPE's headquarters relocation as a symbolic event revealing the declining appeal of Silicon Valley, which has long been a cradle for IT startups.
Palantir Technologies and Charles Schwab also announced plans to leave expensive California and move their offices to regions with lower living costs.
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