The San Francisco multifamily market gained momentum in the second quarter of 2025 compared to the same period last year, with notable differences between smaller two-to-four-unit properties and larger five-plus-unit buildings. A key factor driving this activity continues to be rising rental rates, which Zillow reports have climbed more than nine percent since March.
It’s important to remember that the multifamily market in San Francisco consists of a relatively small number of highly varied properties across a wide range of neighborhoods, which can limit the reliability of broad statistical analysis.
For two-to-four-unit residential buildings, pricing remained essentially flat year over year. The median sales price ticked up just 0.1 percent to $935,000, while the median days on market held steady at twenty-four. Price per square foot, however, rose nearly five percent to $616. Demand was markedly stronger: the number of properties that went into contract jumped thirty-four percent, and closed sales increased fourteen percent, even as inventory at the end of the quarter declined by about eleven percent. Half of these properties sold for over asking, down slightly from last year, and the average sale-to-list ratio eased just a fraction to 103.8 percent. Overall, the segment is showing healthy buyer activity with limited supply, creating a competitive backdrop heading into the second half of the year.
The five-plus-unit commercial segment also turned in a strong quarter. The median sales price climbed more than fifteen percent to $2.5 million, while median days on market shortened to thirty-six. Although the price per square foot fell about six percent to $366, the median price per unit rose six and a half percent to $332,667, reflecting improved per-unit performance. Investor metrics were also favorable: cap rates edged up to 5.91 percent, and gross rent multipliers decreased to 11.1, signaling better potential returns. Closed sales surged nearly twenty-four percent, and properties going into contract increased almost eight percent, supported by a modest rise in available inventory.
Overall, the multifamily market in San Francisco is showing signs of renewed confidence among both buyers and investors. Smaller properties are benefiting from strong demand and limited supply, while larger buildings are seeing pricing gains supported by rising rents and improving income fundamentals.
