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The Market’s Hurdles Fall Further
into the Rear View
The metro’s post-pandemic progress reaches new phase. San Francisco’s multifamily market is expected to stabilize in 2026 after a strong 2025, which saw a triple-digit basis-point drop in vacancy. The city’s expanding role in AI and tech innovation — driven by startups drawn to downtown — continues to generate high-paying jobs and reinforce renter demand. As a result, rent growth has been strongest in downtown submarkets such as SoMa and Mission Bay, both of which posted year-over-year gains exceeding 10 percent in late 2025. Higher-income renter demand is evident in Class A performance, with the average monthly rent up nearly 10 percent metrowide. By contrast, San Mateo-Burlingame has seen Class A vacancy climb above 10 percent, reflecting slower growth in high-paying jobs locally. However, Class B and C vacancy rates remain below 4 percent in this area as of late 2025, keeping San Mateo’s overall countywide vacancy rate comparable to San Francisco’s. Still, these dynamics underscore the diverging momentum ahead between suburban areas and the urban core.