How Tech is Restructuring the San Francisco Housing Market

The San Francisco housing market has been one of the hottest markets for the

last four years, despite the steep ever-increasing prices of rental units. From 2012 to 2016, home prices rose 66%, which made buying into the housing market an impossible dream for many. However, the high cost of rentals has led to a never-before seen trend.


Contrary to past trends, 1- and 2-bedroom units today are struggling against the rising popularity of 4- and 5-bedroom units. Soaring prices and changing job markets have shifted the tides of the in-demand market.


Shifting Tides


The job market and ‘cool’ factor of recent years has increased the attraction of the big city for masses of post-college adults aged 24-39. These younger folks often aren’t looking to settle down just yet, but they don’t want to spend $3000-$4000 on housing either. They’d rather spend money on travel and living life to the fullest.


The tech-oriented culture of the Bay Area has seeped into the general awareness of young professionals and families. Coworking is one of the latest trends in the tech and startup world. Four and 5-bedroom units are the newest hot commodity—the communal workspace idea has spilled over into residential  living.


Young professionals are sharing accommodations for a fraction of the cost of living on their own. In Nopa, for example, the rent for 4- and 5-bedroom units has doubled with the demand. But even at $8000-10,000 a month, shared living in these spaces is both practical and cost-effective.


Advice for Landlords and Agents with 1- and 2-Bedroom Units


Fix up your fixer-uppers. Smaller units are decreasing in value as renters opt for more bedrooms. But nice, clean and updated units are still holding their value among the techie crowd. Avoid putting your sub-par rental on the market in its current condition. Instead, consider updating it to increase its value and attraction level. It might mean a simple fun accent wall, updated color pallets to attract the modern crowd and perhaps a new light fixture or two.


Housing and rental markets have always been dynamic and shift according to popular trends. These trends are often shaped in part by the housing market. To stay competitive and succeed, real estate agents and landlords need to be equally dynamic and move with the tides. This means redefining textbook expectations. As you develop affinity with a host of good candidates and see the market through new perspectives, you can ensure your own success in this market.