San Francisco Multifamily Report – February 2024
There’s cause for optimism as occupancy remains flat but healthy.
Despite some San Francisco officials bracing for a potential “doom loop,” optimism persists for a rebound to pre-pandemic performance. Rents declined 0.4 percent on a trailing three-month basis through December, to $2,753, but last year developers also delivered the third-largest annual volume since 2016. Meanwhile, demand kept occupancy flat at a still healthy 95.3 percent in December.
San Francisco’s employment market expanded 2.1 percent, or 42,000 net jobs, on a year-over-year basis, trailing the 2.3 percent U.S. rate. During this time, three sectors lost 14,200 jobs combined, and the hardest hit remained professional and business services (-9,500 jobs). Unemployment in the metro rose from 3.3 percent in January to 4.0 percent in November, but still outperformed the state (4.9 percent), Los Angeles (4.7 percent), San Diego (4.2 percent) and Sacramento (4.5 percent), and trailed the national (3.7 percent) and San Jose (3.9 percent) figures. Education and health services and leisure and hospitality led job gains, adding 39,200 jobs combined.
Developers delivered 7,737 units in 2023, and in December had 16,573 units underway and 126,500 in the planning and permitting stages. Meanwhile, transaction activity dropped to the lowest level recorded this past decade, at $1.1 billion in sales, for a price per unit that plummeted 38 percent year-over-year, to $215,575 in December.
