San Francisco Multifamily Report – February 2023
Multifamily construction starts also rose last year.
San Francisco rent evolution, click to enlarge
San Francisco’s multifamily market posted a steady recovery for most of 2022, slowly moderating during the second half of the year. Rents decreased 0.4 percent on a trailing three-month basis through December, to $2,787. Year-over-year, rates were up 3.8 percent, 240 basis points lower than the U.S. figure. The metro is one of the few in the nation where occupancy rose, up 20 basis points year-over-year, to 95.4 percent as of November.
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San Francisco sales volume and number of properties sold, click to enlarge
San Francisco unemployment stood at 2.8 percent in November, according to preliminary data from the Bureau of Labor Statistics, leading the state (4.1 percent), the U.S. (3.6 percent) and all major California metros except San Jose (2.4 percent). The job market expanded 4.9 percent in the 12 months ending in October, outperforming the 4.1 percent U.S. figure, but the metro still has a long way to go to recover the residents and jobs lost during the pandemic. In addition to the projected recession, the local economy has to overcome a pullback in venture capital investments and staff reductions and hiring freezes in the tech sector.
San Francisco. Photo by DianeBentleyRaymond/iStockphoto.com
Developers delivered 6,860 units in 2022, below the 7,300 annual average of the past five years. The construction pipeline had 19,500 units underway, posting an increase in the number of construction starts. Meanwhile, multifamily investment volume surpassed $2.2 billion in 2022, mainly during the first half of the year. The average price per unit stayed high, at $410,446.
