San Francisco Multifamily Report – July 2023
Rents in the Bay Area are close to their mid-2022 levels.
San Francisco rent evolution, click to enlarge
The San Francisco multifamily market slowed down, following a modest 2022 that closed at 4.2 percent. Rents slid 0.1 percent on a trailing three-month basis through May, to an average of $2,784, while the U.S. figure climbed. On a year-over-year basis, San Francisco rents were down 0.4 percent, making it one of eight major U.S. markets that saw rates decline over the 12 months ending in April. Meanwhile, occupancy highlighted the metro’s ongoing need for more housing. Despite depreciating, the rate was down just 20 basis points in one year, hitting 95.3 percent in April, above the U.S. average.
San Francisco sales volume and number of properties sold, click to enlarge
Unemployment in the metro was 3.1 percent as of April, according to preliminary data from the Bureau of Labor Statistics. Although it remained below both the U.S. rate of 3.4 percent and California’s 4.5 percent, it still increased from the end of last year, as tech layoffs and stifled economic expansions impact the Bay Area. In the 12-month period through March, employment expanded by 3.1 percent, with 61,100 jobs added. Leisure and hospitality remained the top performer, expanding by 9.0 percent, or 24,700 positions.
San Francisco. Photo by Patrick Jahns/iStockphoto.com
Year-to-date through May, developers added 1,420 units to the market, representing a 0.5 percent expansion of stock—less than half the figure recorded during the same period last year. Meanwhile, investment activity declined, as well, with $770 million registered during the first five months of 2023.
