San Francisco Multifamily Market Report
2024 Investment Forecast
Luxury Units Slated for Downtown and
Adjacent Zones Set up Near-Term Hurdles
Recovery continues, despite some localized Class A friction. After a challenging 2023, less attrition among the city’s white-collar segments is anticipated this year. Losses in some tech fields should be tempered by the expansion of the nascent AI sector. Renter demand fostered by this industry should support luxury apartment leasing in submarkets near major office corridors, which remain heavily impacted by the aftermath of the pandemic. Still, acute supply-side pressure will adversely affect some of these zones. Entering 2024, more than 1,000 units were underway in the SoMa submarket, which will translate to a 4.9 percent inventory expansion here by mid-2025. Absorption here trailed additions through most of last year, indicating demand may continue to lag supply in this locale, at least for the short term. The market’s broader outlook is more positive, aided by robust hiring in the health and education services sectors, which have grown roughly 10 percent over the last four years, roughly double the national pace. Employers in these categories are heavily dispersed throughout the metro, supporting leasing for mid- and lower-tier units in a wide swath of the city’s neighborhoods.