San Francisco Multifamily Report – February 2022
Despite taking a strong early hit, Bay Area rentals made great strides over the past year.
San Francisco’s multifamily market made great strides in 2021, although there are still hurdles to overcome. Rents rose by just 0.1 percent on a trailing three-month basis through December, to $2,647, but the softening mirrors the national trend during winter. The occupancy rate in stabilized properties paints the picture of a market with an improving demand for rentals, rising by 200 basis points in the 12 months ending in November, to 94.6 percent.
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The unemployment rate gained 240 basis points in 2021 through November when it dropped to 3.8 percent, faring better than both the state (6.9 percent) and national (4.2 percent) rates, according to data from the Bureau of Labor Statistics. The job market expanded by 5.0 percent in the 12 months ending in October, trailing the nation by 30 basis points. Of the 122,000 positions gained during the period, leisure and hospitality accounted for nearly half (53,100 jobs), but uncertainty persists. Professional and business services added 41,900 jobs and continues to sustain the economy as large employers are adjusting to current conditions.
Developers delivered an all-time high of 8,425 units in 2021 and had another 22,175 units under construction. Transaction activity also picked up, surpassing $2.6 billion for the year, and the per-unit price rose 13.7 percent, to $413,709.