The San Francisco multifamily market is poised for broad recovery, according to data from Marcus & Millichap. At the start of the second quarter, several of the city's largest employers returned to the office, either part-time or full-time, helping to catalyze the multifamily recovery. As a result, Marcus & Millichap expects multifamily rents to grow 9.5% this year, exceeding the 9.1% rent growth in 2021 and putting the average monthly rent above $3,000 for the first time.

In the second quarter two dozen major companies have returned to the office in the city, and Facebook and Google returned to the office in April. While not all of these companies are returning to the office full-time, the report notes that even part-time office usage will drive demand for apartments in the city.

The apartment vacancy rate is a good indicator of activity. The market entered 2022 with a 7.2% vacancy in the CBD after falling 520 basis points in 2021. This year, Marcus & Millichap expects the vacancy rate to fall another 60 basis points with renters absorbing about 4,400 units. This would close the year with a vacancy rate of 6.3%, still about 100 basis points above the 2019 year-end vacancy.