Rents Surge, Buyers Return: San Francisco’s 2–4 Unit Market Strengthens in Q2 2025
San Francisco’s 2–4 unit building market rebounded in Q2 2025, with 114 sales closing — up 14% from a year ago and a clear improvement over the slower pace in Q1. Demand accelerated through the quarter, with June marking the highest monthly count of listings going into contract since spring 2022. The absorption rate climbed to 39%, one of the strongest quarterly levels in recent years, reflecting renewed buyer confidence. Rising rents were a key driver, with median asking rents up roughly 11% year-over-year and vacancy rates remaining low. This rent growth has helped counterbalance elevated financing costs, keeping smaller multi-family properties attractive to both investors and owner-occupants.
Pricing metrics showed stability alongside stronger activity. The Q2 2025 median sales price rose from Q1 to $1.725M, landing just under Q2 2024 levels, while average $/sq.ft. values increased significantly quarter-over-quarter and ticked higher year-over-year. Two-unit buildings sold at a median of $1.655M ($632/sq.ft.), three-unit buildings averaged $1.9M, and four-unit buildings came in at $1.72M. District-level data highlighted premiums in neighborhoods such as Pacific Heights, Russian Hill, and Noe Valley, where median prices often exceeded $1.9M, while more affordable opportunities remained in areas like the Sunset and District 10. With sales volume rebounding, rents climbing, and pricing holding steady, San Francisco’s 2–4 unit market is positioned for continued resilience heading into the second half of 2025.
Hybrid investment properties — where owners live in one unit and rent out the others — remain especially popular. These buildings offer the flexibility of homeownership with added rental income, making them a smart and sought-after option for buyers looking to build long-term wealth.
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