San Francisco continued to see increasing multifamily rents in February with the annual average growth rate increasing to 2.8%, the highest yearly increase since the second quarter of 2022.
Moreover, the average asking rent across San Francisco was 1.3% higher than January.
On a monthly basis, the average apartment rent across San Francisco's multifamily sector is $3,200 per month. That’s the highest level on record, having just overtaken the peak rent set in the market in the second quarter of 2019.
The rent increase in San Franciso further puts it on track to close the gap with New York, where the average asking rent currently is $3,250 monthly. In 2022, New York overtook San Francisco as the market with the highest average apartment rent in the nation, as the Bay Area market struggled to recover from the elevated vacancy rate resulting from residents and workers moving away from the city during the COVID-19 pandemic.
Apartment rent in San Francisco's Mission Bay neighborhood saw the biggest increases over the past year, averaging 6.4%. New apartments in the area, such as The Canyon and Verde at Mission Rock, have proven popular with renters. The area continues to grow, with new office openings for Visa and OpenAI drawing workers and paving the way for retail, restaurant and more housing developments.
Furthermore, the past year saw a return to rent increases in some of San Francisco’s struggling neighborhoods. In recent years, high vacancy and social issues related to crime, homelessness and drug abuse have kept a lid on apartment rents in some areas. Notably, the South of Market neighborhood saw average rent increases of 4.5%, and rents in downtown San Francisco increased by just 2.3%.
The upward momentum in San Francisco’s apartment rents is set to continue in the quarters ahead, with average rent projected to increase by more than 4% in 2025.
