San Jose & Bay Area Rents Climb as Exodus Hotspots Fall
While many Sun Belt cities that saw a boom in residents during the pandemic are now experiencing significant drops in rental prices, the Bay Area market is telling a different story. For San Jose residents, the trend continues upward, with local rents recently surpassing pre-pandemic levels and showing no signs of slowing down.
A Tale of Two Rental Markets
A new report from Realtor.com unveils a fascinating divergence in the national rental market. Cities that once served as popular destinations for Bay Area residents seeking more affordable living, such as Las Vegas and Austin, are now experiencing significant rent drops, marking a clear reversal from their pandemic-fueled peaks.
Where Rents Are Falling
In Las Vegas, median asking rents have dropped a notable 13.6% since their June 2022 peak, now sitting at $1,443. Austin, a long-standing hotspot for tech workers relocating from the Bay Area, has seen rents fall 13.4% since September 2022, with a median of $1,436. As Realtor.com economist Jiayi Xu noted, these cities experienced “rapid rent growth during the pandemic, when many people moved to warm Sun Belt areas, creating a high starting point for corrections.” The combination of slowing inbound migration and significant new multifamily housing supply has further tempered costs.
The Bay Area’s Upward Trend
Contrast this with our robust local market. While San Francisco experienced years of rental decline during the pandemic, its rents are now firmly “jumping up to the top of rental price lists,” having even surpassed pre-pandemic levels. For the San Francisco metro, the median asking rent in August 2025 stood at $2,831. Even more impactful for San Jose residents, the San Jose metro recorded an eye-popping median asking rent of $3,413 in the same month, according to the latest Realtor.com data. Local experts widely predict these prices will continue their ascent, fueled by a renewed appreciation for urban living and the region’s undeniable economic strength.
What’s Driving the Local Surge?
The rapid resurgence in Bay Area rental prices, profoundly affecting San Jose, stems from a confluence of factors. San Francisco’s enduring role as the region’s cultural and economic epicenter, coupled with a palpable renewed appetite for urban living, is a primary driver. Furthermore, the robust tech sector, particularly an “AI hiring boom” referenced in recent analyses, is attracting new talent and retaining existing workers, intensifying demand. This sustained interest and economic vitality create a challenging environment for renters, pushing housing costs to new highs across the metro areas.
Rents at a Glance (August 2025 Median Asking Rent)
| Metro Area | Median Rent | Change from Peak (approx.) |
|---|---|---|
| San Jose, CA | $3,413 | — (Climbing) |
| San Francisco, CA | $2,831 | — (Climbing) |
| Las Vegas, NV | $1,443 | -13.6% (Since June 2022) |
| Austin, TX | $1,436 | -13.4% (Since Sept 2022) |
Frequently Asked Questions
- Are Bay Area rents expected to keep rising?
Yes, experts anticipate that the strong demand, particularly in economic hubs like San Francisco and San Jose, will continue to drive rental prices upward. - Why are some Sun Belt cities seeing rent declines?
Cities like Las Vegas and Austin experienced rapid rent growth during the pandemic due to a surge in migration. Now, a slowdown in that migration coupled with significant new housing construction is leading to price corrections. - How does San Jose’s rental market compare to other major cities?
San Jose’s median asking rent of $3,413 in August 2025 places it among the highest in the nation, even surpassing San Francisco’s metro median of $2,831 at that time, according to Realtor.com. - What factors contribute to high Bay Area rents?
A strong local economy, a renewed preference for urban living, and continued demand from a thriving tech industry (including an “AI hiring boom”) are key drivers. - How does the Bay Area rental trend compare to the national average?
While the average rent across the 50 largest metros is down 2.6% from its August 2022 pandemic peak, the Bay Area market, including San Jose and San Francisco, is moving in the opposite direction, with rents increasing and surpassing previous highs.
For San Jose residents, understanding these contrasting market dynamics is crucial. While national trends might suggest a cooling, our local market remains highly competitive, making informed decision-making paramount for renters and prospective residents alike.
Bay Area Rents Climb While Exodus Hotspots Fall
