April 2023 Multi-Family Market Report for Residential 5+ Unit Buildings
5+ unit residential income buildings. Listings and sales reported to NorCal MLS Alliance. This market consists of a relatively small number of sales, of buildings of widely varying sizes, qualities, and financial characteristics, across a broad range of locations: This makes meaningful statistical analysis more difficult. All numbers should be considered approximate.
The environment in the San Francisco multi-family market continued to be challenging in Q1 2023 due to both local issues and national factors, with a drop in quarterly sales volume rivaling the plunge seen in the immediate aftermath of the pandemic hitting in early 2020.
Local factors include high-tech layoffs, half-empty office buildings, a continued decline in population in 2021-2022 (though the decline is much reduced from the previous 12-month period), and various social/political issues. Interest rates remain more than twice as high as at the start of 2022. According to Apartment List, average asking rents in San Francisco climbed in the first half of 2022, but dropped back down, erasing the gain, in the second, and have ticked down slightly so far in 2023: Rents remain well below pre-pandemic rates. The recent banking crisis is reportedly making it somewhat more difficult to buy properties as lenders pull back or raise rates.
According to the Wall Street Journal, quoting data published by Co-Star, national sales of multi-family buildings in Q1 fell at the fastest rate since 2009. The WSJ also reported that, according to the MSCI Real Assets pricing index, national multi-family prices dropped 8.7% in February on a year-over-year basis (with another source estimating a sharper drop). There were not enough sales in San Francisco in Q1 to make reliable median sales price calculations.
As illustrated in this report, the standard measurements of apartment building values in San Francisco - GRM, cap rate, $/unit, $/sq.ft. - showed significant declines in Q1. However, considering the low number of sales - of a wide variety of buildings of differing location, size, condition and income generation - these metrics should be considered very preliminary until substantiated over the longer term. Typically, sales activity climbs rapidly in Q2, and should give us much more data.
Data reported to regional MLS associations. Q1 2023 numbers are estimates using data available in early April 2023; Late reported sales may alter these numbers. Statistics are generalities, essentially summaries of disparate data generated by unique, individual sales. They are best seen not as precise measurements, but as broad, comparative indicators. Anomalous fluctuations in statistics are not uncommon, especially in smaller market segments with fewer sales. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers approximate. How these figures apply to any particular property is unknown without a specific comparative market analysis.
San Francisco Apartment Building Market - 5+ Units
Listings Closing Sale in Quarter since 2017
San Francisco Apartment Building Market - 5+ Units
Listings Going into Contract in Quarter since 2018
San Francisco Residential Rents - Approximate, Good Faith Estimates*
Average Asking Rent, 1994 - Present, Q1 Data Points (except as noted)
Average Gross Rent Multiples
San Francisco 5+ Unit Apartment Building Sales
Average Cap Rates
San Francisco 5+ Unit Apartment Building Sales
Average Price per Unit
San Francisco 5+ Unit Apartment Building Sales
San Francisco 5+ Unit Apartment Building Sales
Average Dollar per Square Foot Values
Percentage of Listings Accepting Offers in Quarter (Absorption Rate)
San Francisco 5+ Unit, Multi-Family Building Market Dynamics
San Francisco Apartment Building Market - 5+ Units
Active Listings Listed for Sale at End of Month
5+ Unit Multi-Family Building Markets
12 Months Sales by San Francisco Realtor District
Multi-Unit Residential Property Sales, 5+ Units
12 Months Sales by San Francisco Realtor District*
San Francisco 5+ Unit Apartment Building Sales
12 Months Sales by Price Segment*
San Francisco Unemployment Rates
2019-2023 YTD, per CA Employment Development Department
The San Francisco unemployment rate has ticked up in recent months, though remaining quite low. High-tech layoffs in recent months area a concern for rental market dynamics, especially in the downtown area.
San Francisco Employment Trends
Number of Employed Residents since 2000
Employment Numbers by Month
January 2000 to February 2023
According to EDD, employment numbers have mostly recovered from the spring 2020 plunge, but still remain down by approximately 16,000.
San Francisco Population Trends since 2010
CA Department of Finance Estimates, July 1st to July 1st
San Francisco Apartment Building Sales
By Broker, 5+ Unit Residential Sales, 2020-2022*
Note that the quantity of sales in any given local submarket is usually relatively small and/or the number of sales that report the necessary financial information can be limited. Buildings of different ages, qualities and sizes selling in different periods can cause these average and median figures to fluctuate significantly. Furthermore, the reliability of some of these calculations depends upon the quality of the income and expense figures provided by the listing agents, and sometimes instead of actual members, much less meaningful projected or scheduled figures are used. Late reported listings and sales may change these statistics. Therefore, the above statistics should be considered very general indicators, and how they apply to any particular property without a specific comparative market analysis is unknown.
These analyses were made in good faith with data from sources deemed reliable, but they may contain errors and are subject to revision. Statistics are generalities and all numbers should be considered approximate. Numbers may change with late-reported sales activity.
Compass is a real estate broker licensed by the State of California, DRE 01527235. Equal Housing Opportunity. This report has been prepared solely for information purposes. The information herein is based on or derived from information generally available to the public and/or from sources believed to be reliable. No representation or warranty can be given with respect to the accuracy or completeness of the information. Compass disclaims any and all liability relating to this report, including without limitation any express or implied representations or warranties for statements contained in, and omissions from, the report. Nothing contained herein is intended to be or should be read as any regulatory, legal, tax, accounting or other advice and Compass does not provide such advice. Al opinions are subject to change without notice. Compass makes no representation regarding the accuracy of any statements regarding any references to the laws, statutes or regulations of any state are those of the author(s). Past performance is no guarantee of future results.