The San Francisco multifamily market showed renewed strength in the third quarter of 2025, with transaction activity surging across both small and large buildings. Buyer confidence has been buoyed by rising rental income potential — Zillow reports that citywide rents have increased nearly 16% since the beginning of the year, bolstering returns and drawing investors back into the market.
It's worth noting that the multifamily sector in San Francisco consists of a relatively small number of highly varied properties across a broad mix of neighborhoods, which can make statistical interpretation more volatile. Still, the overall trend is one of steady demand meeting limited supply, leading to a healthier and more active investment landscape than a year ago.
Two-to-Four-Unit Buildings saw a strong pickup in transactions, with properties going into contract up 30.6% and closed sales up 39.8% year over year. Inventory tightened 12%, creating a more competitive environment even as pricing adjusted slightly. The median sales price decreased 8.5% to $1,647,500, but price per square foot rose 2.4% to $599, showing continued interest in well-located assets. Sellers still fared well, receiving an average of 101.8% of list price, while days on market remained quick at 28.
Five-Plus-Unit Buildings also saw renewed investor activity. Contracts surged 81.1%, and closed sales rose 18.4% from a year ago, while inventory fell 31.3%. The median sales price dipped just 1.1% to $2.7 million, and the price per square foot slipped 3.3% to $383, but investor competition strengthened — the share of sales over list price jumped 68%, and sellers averaged 97.1% of asking.
Overall, both segments reflect a market that's stabilizing and becoming more active, supported by limited supply, stronger rents, and rising confidence among buyers and investors alike.
