Q4 2025 San Francisco 5+ Unit Market Update

San Francisco’s 5+ unit apartment building market experienced a strong rebound in 2025, with sales activity reaching its highest annual total in more than 15 years and Q4 recording the strongest quarterly sales volume in over a decade. Buyer demand improved significantly as interest rates declined from recent highs, driving absorption to its highest quarterly level in several years. This renewed momentum reflects increased confidence among investors as market conditions stabilized heading into 2026.

Investment fundamentals also strengthened across the sector. Rents rose approximately 12% year-over-year, approaching pre-pandemic levels, while pricing metrics showed stabilization following the interest-rate-driven correction of recent years. With cap rates remaining elevated relative to prior cycle lows and borrowing costs easing, the 5+ unit market is positioned for continued activity in 2026, particularly for well-located assets with long-term income growth potential.