Bay Area Rents Surge by Nearly 8% as Vacancy Falls Below 3%
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Multifamily landlords in the San Francisco Bay Area are enjoying pricing power. In the second quarter, rents on average surged by 7.7 percent year-over-year in the market to $3,423, according to a report from CBRE.
The strongest performances came out of the SoMA and Downtown San Francisco submarkets, which enjoyed 17.3 percent and 17.1 percent rent growth, respectively.
Those strong gains were followed by vacancy continuing to tighten. The category now finds itself under 3 percent and down 72 basis points from Q2 2025.
In addition, the demand of 5,104 units far exceeded the new supply of 884 units, representing an absorption-to-completion ratio of 5.8x.
Meanwhile, investment activity was the one lagger, with the Bay Area just seeing $2.3 billion in sales volume year-to-date through June. This was down marginally quarter-over-quarter "due to lack of market inventory," according to CBRE.
During Q2 2026, the largest trade in the Bay Area involved The Fay, a 336-unit property in San Jose that went for $175 million. The runners-up were two other San Jose assets (Meridian at Midtown and Almaden Terrace Apartments, which sold for $105.25 million and $87.67 million, respectively. Rounding out the top five were The Highlander ($69.50 million) and Saratoga Gardens ($28.85 million).
Source: GlobeSt/ALM