IPA: Bay Area Multifamily Remains Solid Investment Choice

The Bay Area’s multifamily sector remains a strong contender for investors, according to a new report from Institutional Property Advisors (IPA), a division of Marcus & Millichap. “There is a solid case to be made for the investment appeal and performance potential of the San Francisco Bay Area’s multifamily sector despite news narratives that emphasize the area’s economic challenges,” said Greg Willett, first VP and national director, research services, IPA.

He added, “Key indicators pointing to a strong multifamily market in the Bay Area include employment that exceeds the pre-pandemic level, exorbitant single-family home prices and the limited supply of new apartments.” 

On the affordability front, the report notes that while the national premium to buy a median-priced single-family home versus rent for an average apartment is at a record $1,291 per month, that gap grows to $4,800 per month in the East Bay and is $9,200 per month in San Francisco and the South Bay.

“Northern California’s strong concentration of high-paying jobs underscores the importance of the region’s technology sector and ability to attract venture capital,” added John Sebree, SVP and national director of the firm’s Multi Housing Division. “With innovation as one of the area’s great strengths, the Bay Area should account for a significant share of job creation driven by new artificial intelligence capabilities.”