San Francisco Multifamily Market Report
Market Overview
San Francisco was one of the hardest-hit markets during the pandemic; however, the metro has seen a rebound in employment metrics. Currently, total employment is ahead of the pre-pandemic level. The Bay Area is also home to several large tech companies, such as Apple, Alphabet, and Meta. Employees in the tech segment have high wages, leading to higher rents in the metro.
San Francisco Multifamily By the Numbers
- Vacancy Rate: 6.2%
- Rent Growth: 1.8%
- Delivered Units: 2,214
- Absorbed Units: 2,755
- Sales Volume: $834M
Market Performance
Absorption and vacancy both noted positive metrics in the second quarter, at 2,755 units and 6.2%, respectively. The current vacancy rate is at its lowest level since 4Q19. The Class A and B sectors note the lowest vacancy rates, at 6.0% and 4.8%, respectively. This positivity is due to residents searching for lower rents in the Bay Area. The current monthly average asking rent here is $3,090 per month. While still high, this metric has improved as incomes in the metro have increased.
There has been a delivery of 2,200 units over the past 12 months. Yet, several projects are currently in planning stages, which will lead to an uptick in deliveries next year. Areas south of San Francisco will be the most impacted by this construction, as these new developments are located near areas that house biotechnology and life sciences employers. Investment activity has been slow throughout the past 12-month period. Only 210 transactions closed within the past year, which is below the five-year average of 250 annual transactions.
