San Francisco Real Estate Market Analysis

Houses for Sale in San Francisco

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Located in Northern California, San Francisco sits at the tip of a peninsula bordered by the Pacific Ocean and San Francisco Bay. The city is home to over 880,000 people making it the 4th most populous city in the State of California and the 13th most populated in the United States. The rate of population growth is forecast to be near the national rate in the next year, and with this growth comes more tenants, which is great news for current and future San Francisco real estate investors. In fact, more than 63% of residents in the city live in rental properties as opposed to owning their own homes, according to NeighborhoodScout.

Not only has the San Francisco rental market been leading the nation for years, but its economy has also made a mark on the nation and the world. The city is located at the halfway point between London and Tokyo, making it a world economic center. Because of this, a major part of the local economy is shipping and trade. The city is also a major banking and financing hub as it is home to some of the largest banks in the US as well as over 30 international financial institutions. San Francisco is known as a major tech center. The neighborhood of South Park, specifically, is home to many rising tech companies. Other leading industries include tourism, apparel manufacturing, healthcare, and education.

Even though the city currently boasts a strong and growing economy, the San Francisco real estate market and its affordability could have a negative impact on its health. San Francisco real estate properties are notoriously known for being expensive, and some experts see the continuing appreciation as being detrimental to the growth of the economy. This issue is further exacerbated by the shortage in housing inventory which has lead to a serious imbalance between supply and demand. This can be attributed to the rising costs of construction as well as stringent regulations. Not only has this caused an increase in property prices, but local rental rates continue to rise as well. However, according to the annual real estate report put out by the PWC, there are some solutions on the horizon. With new construction processes planned for implementation in the San Francisco housing market as well as an increase in urbanized suburban developments, the real estate forecast points to some breathing room in the near future.

According to the same report, San Francisco ranks in the top 10 US markets in the Pacific Region for overall real estate prospects. Essentially, if you can afford to buy a San Francisco investment property, then the market can be a great place to invest in real estate.

San Francisco  Real Estate Investment Performance

Facts and Market Trends in San Francisco
Homes For Sale1,972
Airbnb Properties1,946
Rental Properties571
Traditional Vacancy rate3.80%
Airbnb Occupancy Rate67.29%
Mashmeter27.17%
Median Price$1,280,000
Median Rent Price$4,875
Price/sqft$1,024
Median Days on Market64
Price to Rent Ratio35.4
Average Cap Rate
Airbnb2.33%
Traditional1.41%
Average Rental Income
Airbnb$7,457
Traditional$4,348
 
Median Household Income$119,136
Population815,201
Transportation in San Francisco
89 / 100
Very Walkable
77 / 100
Excellent Transit
72 / 100
Very Bikeable
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San Francisco  Rent Prices

RENTAL STRATEGY STUDIOS 1 BEDROOM 2 BEDROOMS 3 BEDROOMS 4 BEDROOMS
Airbnb$3,568$3,891$6,047$8,580$9,408
Traditional$2,337$2,902$3,822$4,796$5,662

San Francisco, CA - Homes for Sale - Newly Listed

1750 Taylor St #1401
San Francisco, CA 94133
North Beach
Condo/Coop
2 beds2 baths3,640 sq.ft.
CAP RATE
Trad. -1.94%Airbnb -1.72%
1945 Hyde St #2
San Francisco, CA 94109
Russian Hill
Condo/Coop
2 beds2 baths0 sq.ft.
CAP RATE
Trad. -1.20%Airbnb -0.47%
45 5th Ave
San Francisco, CA 94118
Presidio Heights
Single Family Residential
6 beds3 baths4,355 sq.ft.
CAP RATE
Trad. -0.92%Airbnb -0.29%
1222 Funston Avenue
San Francisco, CA 94122
Inner Sunset
Single Family Residential
2 beds1 baths750 sq.ft.
CAP RATE
Trad. 0.54%Airbnb 1.65%

Top Performing San Francisco Properties

520 Natoma St #4
San Francisco, CA 94103
South of Market
Condo/Coop
0 beds1 baths330 sq.ft.
CAP RATE
Trad. 6.90%Airbnb 7.99%
1400 Mission St #406
San Francisco, CA 94103
Civic Center
Condo/Coop
1 beds1 baths631 sq.ft.
CAP RATE
Trad. 4.97%Airbnb 7.90%
1400 Mission ST 710
San Francisco, CA 94103
Civic Center
Condo/Coop
1 beds1 baths631 sq.ft.
CAP RATE
Trad. 5.05%Airbnb 7.88%
241 14th St
San Francisco, CA 94103
Mission
Condo/Coop
2 beds1 baths710 sq.ft.
CAP RATE
Trad. 2.98%Airbnb 7.82%

Recently Sold Homes in San Francisco, CA

6 Mint Plaza St #503A
San Francisco, CA 94103
Yerba Buena
Condo/Coop
2 beds1 baths729 sq.ft.
CAP RATE
Trad. 0.66%Airbnb 3.76%
1201 Sutter St #210
San Francisco, CA 94109
Tenderloin
Condo/Coop
1 beds1 baths0 sq.ft.
CAP RATE
Trad. 3.74%Airbnb 5.90%
1461 Broadway #405
San Francisco, CA 94109
Nob Hill
Condo/Coop
2 beds2 baths950 sq.ft.
CAP RATE
Trad. 2.66%Airbnb 5.54%
136 Avocet Way
San Francisco, CA 94124
Hunters Point
Townhouse
2 beds2 baths1,177 sq.ft.
CAP RATE
Trad. 1.83%Airbnb 0.62%

Property Value Changes and Real Estate Appreciation in the San Francisco Housing Market

Naturally, with the high real estate property prices in the San Francisco real estate market comes significant appreciation over the years. Since Q1 of 2000, properties here have experienced a total appreciation in value of 172.36% for an annual average growth rate of 5.34%. This puts the San Francisco housing market among the best places to invest for real estate appreciation in the nation.

Even with the tight inventory and the high property prices, the city is currently a buyer’s market. So, while you may still pay premium prices for a San Francisco real estate investment, your chances for getting a good deal if you negotiate are high at the moment.

San Francisco, CA Top Multi Family Homes

367 Moultrie Street
San Francisco, CA 94110
Bernal Heights
Multi Family
0 beds0 baths2,100 sq.ft.
CAP RATE
Trad. 4.29%Airbnb 3.70%
1876 1878 Bush Street
San Francisco, CA 94109
Lower Pacific Heights
Multi Family
0 beds0 baths4,256 sq.ft.
CAP RATE
Trad. -0.12%Airbnb 0.66%
43 45 Culebra Terrace
San Francisco, CA 94109
Russian Hill
Multi Family
0 beds0 baths3,610 sq.ft.
CAP RATE
Trad. -0.38%Airbnb -0.34%
33 35 Coso Avenue
San Francisco, CA 94110
Bernal Heights
Multi Family
0 beds0 baths2,500 sq.ft.
CAP RATE
Trad. 6.28%Airbnb N/A

Homes Below Median Price in the San Francisco, CA Real Estate Market

520 Natoma St #4
San Francisco, CA 94103
South of Market
Condo/Coop
0 beds1 baths330 sq.ft.
CAP RATE
Trad. 6.90%Airbnb 7.99%
1400 Mission St #406
San Francisco, CA 94103
Civic Center
Condo/Coop
1 beds1 baths631 sq.ft.
CAP RATE
Trad. 4.97%Airbnb 7.90%
1400 Mission ST 710
San Francisco, CA 94103
Civic Center
Condo/Coop
1 beds1 baths631 sq.ft.
CAP RATE
Trad. 5.05%Airbnb 7.88%
241 14th St
San Francisco, CA 94103
Mission
Condo/Coop
2 beds1 baths710 sq.ft.
CAP RATE
Trad. 2.98%Airbnb 7.82%

San Francisco Airbnb Growth and Regulations

San Francisco is the birthplace of Airbnb and its headquarters can currently be found in the city. Since its launch, local officials have worked with the company to legalize and regulate the home-sharing industry in the San Francisco real estate market. Even though the practice is legal, the city has some of the strictest Airbnb regulations in the US. For example, if you’re looking to invest in a non-owner occupied rental property, know that it is outlawed. In order to operate a short-term rental legally in the city, the property must be your permanent residence, meaning you live on site for at least 275 days out of the year. In addition to this, Airbnb San Francisco hosts cannot rent out a property for more than 90 days while not being present overnight.

Another important short-term rental law is that you must be registered with the local Treasurer and Tax Collector as a business entity. You must also obtain a certified host certificate from the City of San Francisco’s Office of Short-Term Rentals. If you’re not, Airbnb and other vacation rental websites will be forced to remove your listing from their website. San Francisco Airbnb hosts are not allowed to have more than one vacation rental property listing at a time.

Airbnb rental properties are also subject to San Francisco’s lodging tax which is 14%. Airbnb collects this tax on behalf of its hosts, but if you list with another vacation rental website, you will be responsible for collecting and remitting the tax to the city. Any violations of these Airbnb regulations will result in serious fines.

Despite these strict short-term rental laws, Airbnb growth is widespread in the city. In February of 2019, there were more than 7,800 listings - an increase of 22% since the laws were put into effect in early 2018.

San Francisco, CA Top Airbnb Homes

San Francisco, CA Homes for Rent

133 Lundys Lane
San Francisco, CA 94110
Bernal Heights
Single Family
3 beds0 baths1,350 sq.ft.
1623 Quesada Avenue
San Francisco, CA 94124
Bayview
Single Family
4 beds0 baths2,758 sq.ft.

San Francisco, CA Open Houses

219 Brannan ST 8B
San Francisco, CA 94107
South Beach
Condo/Coop
1 beds1 baths735 sq.ft.
CAP RATE
Trad. 0.72%Airbnb 1.43%
300 Berry ST 1411
San Francisco, CA 94158
Mission Bay
Condo/Coop
2 beds1 baths932 sq.ft.
CAP RATE
Trad. 1.68%Airbnb 3.22%
901 Tennessee ST 410
San Francisco, CA 94107
Dogpatch
Condo/Coop
3 beds2 baths1,228 sq.ft.
CAP RATE
Trad. 0.99%Airbnb 1.77%
118 Granville Way
San Francisco, CA 94127
Forest Hill Extension
Single Family Residential
4 beds2 baths1,522 sq.ft.
CAP RATE
Trad. 1.21%Airbnb 3.06%

Best San Francisco Neighborhoods for Buying Investment Property

Silver Terrace
San Francisco, CA
49%
Mashmeter
property price
995000
Median
cap rate
3.26%
Traditional
6.39%
Airbnb
rental income
$2,701
Traditional
$5,301
Airbnb
homes for sale
8
occupancy rate
69%
Airbnb
Alamo Square
San Francisco, CA
45%
Mashmeter
property price
1512500
Median
cap rate
3.18%
Traditional
6.51%
Airbnb
rental income
$4,007
Traditional
$8,206
Airbnb
homes for sale
10
occupancy rate
69%
Airbnb
Western Addition
San Francisco, CA
45%
Mashmeter
property price
672000
Median
cap rate
6.20%
Traditional
15.38%
Airbnb
rental income
$3,471
Traditional
$8,610
Airbnb
homes for sale
8
occupancy rate
71%
Airbnb
Central Sunset
San Francisco, CA
41%
Mashmeter
property price
1595000
Median
cap rate
2.35%
Traditional
4.12%
Airbnb
rental income
$3,122
Traditional
$5,481
Airbnb
homes for sale
19
occupancy rate
74%
Airbnb
Corona Heights
San Francisco, CA
40%
Mashmeter
property price
1600000
Median
cap rate
4.01%
Traditional
5.40%
Airbnb
rental income
$5,352
Traditional
$7,197
Airbnb
homes for sale
19
occupancy rate
71%
Airbnb
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