Research - MAY 8, 2019

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San Francisco multifamily not slowing down, despite media criticism

by Andrea Zander

Despite being ranked the most expensive to live in the United States, San Francisco multifamily sector is not slowing down.

More than 4,300 apartment units were delivered in 2018, with an additional 19,683 units under way as of February. Meanwhile, rebounding rent growth boosted investor appetite, with $2.2 billion in multifamily assets trading in 2018. With development slated to hit a new cycle peak this year and absorption keeping up, Yardi Matrix expects rents to rise 2.7 percent in 2019.

San Francisco rent growth rate was at 4 percent year-over-year for the first two months of 2019, 40 basis points above the U.S. rate. The average monthly apartment rent rose to $2,660, a hefty $1,234 above the national figure.

While completions in the area are slated to reach a new cycle peak this year, rental demand remains strong, boosted by a still-expanding economy, concluded Yardi. Absorption should keep up the pace. Yardi Matrix expects rents in the metro to advance 2.

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