This article guides individuals interested in learning about the demographics and current housing market of San Francisco, one of the most popular metropolitan areas in California and the United States.
With its vibrant culture, diverse population, and thriving economy, San Francisco has been a hub for homeowners and renters looking for opportunities in one of the country's most dynamic real estate markets. This overview will take a closer look at some of the key features that define the San Francisco housing market.
We will explore factors such as demographic trends among residents, seasonal changes in the market, and critical challenges and opportunities faced by those looking to invest in or manage properties in this city.
San Francisco is home to some of the world's most desirable real estate, and properties maintain their value over time. San Francisco consistently ranks as one of the country's most expensive places to live. San Francisco's market was overheated in 2021 and early 2022. However, according to an October 2022 Compass report, most homeowners' mortgages are held at historically low rates. In addition, new listing numbers are down, and substantial employment stays constant in the city.
These factors contribute to a market correction and adjustment period, with real estate in San Francisco expected to hold long-term value. The city is decorated with charming hills, picturesque cable cars, and stunning Victorian architecture and built upon a solid real estate foundation. San Francisco remains an attractive place to live and continues attracting national and international real estate investment.
According to the U.S. Census Bureau, the San Francisco-Oakland-Berkeley Metro area has the 12th most populous metro in the U.S., with a population of roughly 4.7 million. The city is known for its diverse and eclectic residents, many of whom have flocked to the area in search of opportunities in tech, business, and other industries. According to SoFi demographics for the San Francisco market, the median income is $112,449, and the median age is 38.2 years. In addition, 58.1% of San Franciscans are college educated, 37.6% are homeowners, and 41.7% are married.
According to studies from San Francisco planning, a record number of close to half a million people both live and work in San Francisco. The majority of the increase in workers in San Francisco has been driven by growth in workers earning more than $100,000 per year. However, workers earning less than $75,000 continue to be a majority of the workforce. San Francisco renters are typically young professionals or students looking for flexible living arrangements. Due to the high cost of living in San Francisco, many young renters are looking for a roommate or co-living solutions through companies like Bungalow to split expenses. San Francisco has a large student population as it is home to the University of San Francisco, San Francisco State University, UCSF, California College of the Arts, Golden Gate University, San Francisco Art Institute, and many more universities. According to University Guru, popular higher education subjects studied in San Francisco are clinical medicine, molecular biology and genetics, art, social sciences, artificial intelligence, biotechnology, law, education, and agricultural sciences.
The San Francisco housing market is dynamic and continuously rated as an exciting place to live. San Francisco renters tend to be highly mobile, with many people moving in and out of the city for work or school. As a result, diverse educational and employment opportunities and experiences exist for individuals and families of all ages and backgrounds.
San Francisco is home to a diverse population, with renters from all over the United States and the world. As a result, the San Francisco rental market is one of the most expensive in the United States. The average rent for San Francisco is $3,397 a month for an average apartment size of 740 square feet, according to RentCafe. According to data from Rent.com, the average rent for a studio in San Francisco is $2,989, the average rent for a 1-bedroom apartment is $3,537, the average rent for a 2-bedroom apartment is $4,713, and the average rent for a 3-bedroom apartment is $5,738. San Francisco's high rents are due to a combination of factors, including the city's limited space, lucrative employment opportunities, and desirable weather and location. You can see more in-depth statistics on Zillow's San Francisco rental market summary.
According to San Francisco Planning's Housing Needs and Trends Report, here are some notable recent broad trends affecting housing stock:
The lot size, the physical condition of the buildings, and floor plans vary greatly across San Francisco and by neighborhood. Single-family homes (SFH), multi-unit homes, townhouses, condominiums, tenancy-in-common (TIC) units, and apartments are common housing types in San Francisco.
San Francisco’s housing is much older than the housing in the rest of the Bay Area, with nearly half of the housing built before 1940. Victorian and Edwardian-style homes, Italianate row houses, stick homes, Queen Anne-style homes, Monterey Revivals, and Marina homes are popular house styles seen across San Francisco.
With its vibrant culture, excellent job opportunities, and beautiful waterfront setting, San Francisco is a highly desirable city to live and. However, high demand also comes with a steep price tag, as the rental market in San Francisco remains competitive and expensive.
San Francisco's tech industry contributes to a large portion of the city's economy.
San Francisco is known for being a hotbed of technological innovation. Some of the world's most influential tech companies have headquarters here, including Google, LinkedIn, Tesla, Microsoft, and Mozilla. Despite the tech exodus in 2020 amidst the Covid-19 pandemic, San Francisco is still considered the tech world's center. The Inc. 2022 list of the 5,000 fastest-growing private companies in the United States features 167 companies in San Francisco.
In 2019, San Francisco's gross domestic product was $501 billion, making it the fifth-largest economy in the United States. Finance is another important economic sector in the city, followed by business services like consulting, retailing, and tourism.
According to research by JPMorgan Chase on the San Francisco economy in 2019, the median household income in San Francisco is $96,265, unemployment is one percentage point lower than the rest of the country, and average hourly wages are $10 higher than the national average. San Francisco has the third highest number of millionaires and billionaires per capita in the United States. The range of income among renters in the city varies widely—some households earn over $200,000 per year, and some much less.
San Francisco property managers and homeowners should expect to deal with various renter incomes and credit scores. In addition to solid work opportunities, the city offers a unique blend of cosmopolitan lifestyle opportunities and beautiful waterfront scenery that attracts residents worldwide. Because of the high demand supported by solid employment and the lifestyle, prices for homes in the area remain expensive. Demand for housing and the overall economy of San Francisco will continue to be strong in the coming years.
Seasonal trends and demand in San Francisco have cyclical impacts on the housing and rental market. The rental market in San Francisco is highly competitive and expensive year-round, but prices will fluctuate depending on the season. In general, the San Francisco real estate market has two distinct seasons: winter and summer. The winter season is generally considered from November to April, while the summer is from May to October.
San Francisco property managers typically see an increase in rental prices during the summer months due to increased demand from tourists. San Francisco property management companies also see an increase in demand for short-term rentals during major holidays such as Thanksgiving, Christmas, and New Year's Eve. San Francisco homeowners and property managers should cater to these seasonal fluctuations in demand and adjust rental expectations accordingly.
San Francisco property management requires knowledge of the local market. Each neighborhood in the city has its unique culture and attractions. San Francisco homeowners and property managers should be familiar with the amenities and attractions in their community to serve renters best. According to neighborhood information data from Rent.com, the most affordable neighborhoods to rent in San Francisco in 2022 are Mission Dolores, Chinatown, and Inner Richmond.
Rincon Hill, Western South of Market, Telegraph Hill, Pacific Heights, or South of Market are the most expensive neighborhoods to rent. The most popular communities for renting in San Francisco are Noe Valley, Mission Dolores, and Lower Haight. You can read about Doorstead's recommendations for the strongest property investments in San Francisco in 2022 or check out some of the best areas to rent and live in San Francisco.
If you're considering renting out property in San Francisco, you'll need to decide whether to manage the property yourself or hire a professional San Francisco property manager or service.
Some of the main circumstances to consider before deciding to self-managing your investment home in San Francisco are the size of your property, the location, and neighborhood of your property, and the bandwidth you have to delegate to management.
We wrote an in-depth article addressing each of these considerations for San Francisco homeowners considering self-managing their homes. This article outlines how you should approach these determinants and alternative property management options if any of these prove to be a barrier. Doorstead also has a guide on the Dos and Don't of Self Managing in San Francisco and Doorstead's Complete Guide to Property Management.
San Francisco homeowners increasingly turn to professional management companies to help navigate the city's ever-changing regulations. According to a recent report by Buildium, the number of rental owners who use a property manager has risen from 55% pre-pandemic to 64% during the height of the pandemic and then stabilizing at a new high of 61% as of mid-2021. In addition, 25% of rental owners currently working with an external property manager do so primarily to ensure their compliance with current regulations in San Francisco. Property managers can help ensure the property complies with all current regulations, freeing homeowners to focus on other matters.
The main challenges of self-managing property in San Francisco in 2022 are high turnover rates, strict rental laws, and accurate budgeting for repairs and maintenance. Here are our suggestions for mitigating these top challenges.
If you're considering hiring a property management service instead of self-managing your home in San Francisco, Doorstead is a locally loved full-service property management option. You can learn about the process of working with Doorstead, read testimonials from our homeowners, or enter your property address to get an initial assessment from Doorstead.
Did you find this article helpful in breaking down San Francisco's demographics? If so, please share it with your friends or family! Is there anything we should have included or remembered to mention? Have ideas for collaborating on an article? Please email [email protected], and we'd love to discuss.
And if you're looking for more helpful tips on San Francisco property management, be sure to visit our blog.
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