How San Francisco Changed from 2020 to NOW (The Comeback)

San Francisco just did the impossible. 2020 didn't just dent San Francisco, it completely rewired the city. Office vacancies skyrocketed, retail vacancies skyrocketed, tourism dropped, rents dropped, home prices dropped, crime and homelessness surged. Everyone said it was over for the city by the bay, but in the last year, San Francisco has completely rewritten the script. Office vacancies are down, retail is stabilizing and filling back in, street safety metrics are improving, tourism is back, Conventions are back, and the rental and home purchase markets in San Francisco are among the hottest in the entire nation. This is Austin Klar, your lawyer turned real estate agent in San Francisco and Marin County, and in this video I'm going to show you the receipts for all that's happening in San Francisco. It's not just hype, the numbers back it up. I'm going to break down what changed from the pandemic years to now and what it means for you, whether you already live here or you're thinking about relocating to the city. And hopefully you can see how all of these factors are interrelated and impact each other, and each play a vital role in the next phase of San San Francisco. So let's get right to it and start with what's been happening in San Francisco's office market, because I think the office market is one of the largest drivers of change for our local economy. And before we celebrate the office comeback, we've got to go back in time to the very bleak hole that San Francisco fell into during the pandemic. In 2019, before the pandemic, office vacancies in San Francisco were at record lows at about 4.7%. Downtown San Francisco has historically been the economic center for the entire Bay Area, and before COVID nearly half a million people commuted to downtown every single day, driving a ton of business and economic activity for the city, and that all turned on a dime once the pandemic hit. From 2020 to 2021, office vacancy soared past 20% as remote work took over, and by 2024, San Francisco had become the national poster child for vacant office towers, with office vacancies cresting at over 37%. Fast forward to 2025, we haven't fixed office yet, we're still far from that, but we are very clearly heading in the right direction. Starting with Q4 of 2024, we've seen 3 consecutive quarters of vacancy declines with positive net absorption of 780— square feet of office space. And that's the largest occupancy increase we've seen since Q3 of 2018. So before the pandemic, gross leasing activity totaled 2.6 million square feet of office space in Q2 of 2025 alone and brought the yearly total to 5.5 million square feet, an over 40% increase from the same time last year. And there's no doubt that the principal driver of that surge is tech, a reemergence of tech in San Francisco. The top 25 leases of Q2 2025 were tech-driven. And over the past 2 years, by far the most leasing activity has been driven by AI companies in particular. OpenAI, Harvey AI, Anthropic, Scale AI, and many more have been snatching up office space in the city. And the offices aren't just sitting empty. Keycard swipes rose to about 40% as of summer of 2025. That's one of the highest readings we've seen since 2020. And according to Placer.ai's data, which tracks office activity for over 1,000 commercial buildings, San Francisco's office foot traffic has rose over 21% year over year. And commuting is coming back too. BART's weekday ridership is up. Uni's weekday ridership is up. Offices aren't just getting leased. People are actually coming back and using them. And that's because a majority of companies in the city are requiring at least part-time in-office. They're either hybrid in-office, out-of-office, or full-time in-office. And workers are coming back to much more pleasant office experiences. Much of the new leasing is happening in either trophy buildings in the city with incredible views and/or newly renovated high-end amenitized offices with like gyms, spas, restaurants, lounges. Transamerica Tower is the best example of purchased in 2020 for over $600 million, and in the middle of an over $400 million revamp, its vacancy rate is far below city average, and the rents it's commanding at the renovated spaces are among the highest we're seeing in the city. And other developers are taking note and copying Transamerica's playbook and putting plans in place for mega office towers in San Francisco. I've got separate videos on that and a lot of the projects that they're working on. I'll link that in the description below. If you're interested, go check it out. But suffice to say, a lot of heavy-hitting developers, some of the largest office developers in the entire world, are betting big big on San Francisco's office market. And that's because of the trends we're already seeing. So we have a lot more activity in the commercial hubs in San Francisco, and that's driving some of the things that I'm going to talk about later in this video— the falling crime, the rise in tourism, the rise in retail presence, increasing street safety generally, and the rise in home prices. Before I get there, if you could do me a huge favor, if you like videos about what's going on in San Francisco, current events, new developments, or all things San Francisco real estate, subscribe to my channel because I make videos about that stuff every single week. And if you're thinking about buying a place in San Francisco and want to learn more about what's happening in our local market, given all the changes that we're seeing, reach out to me. I was a lawyer at one of the biggest law firms in the world before getting into real estate, and I've helped numerous people relocate here from all over the country. I'd be happy to be a resource for you. My contact info is in the description below. Reach out anytime. And now back to how San Francisco is completing the comeback that most people thought was impossible. And the next pillar of that comeback is the rise in tourism. Tourism reached its peak in San Francisco in 2019. 2019 with 26.2 million visitors and over $10 billion of spending. In 2020, those numbers completely collapsed, just 10 million visitors and $3 billion of spending. But just like with office, things are on the up and up for tourism. The San Francisco Travel Association released an updated forecast predicting higher visitorship and a growth in visitorship spending in 2025. Specifically, in 2025, we're expected to see about 23.5 million visitors spending about $9.3 billion. And that's up from 2024, but obviously below the peak peak of 2019. The point is, it's trending back up. We had a record number of visitors at the Ferry Building as of Q1 of 2025. We're expected to have 13 million visitors to Fisherman's Wharf alone this year, and they're spending millions of dollars. And a lot of that is thanks to a massive multimillion-dollar revamp that the wharf is undergoing right now. And this tourism bump is in part due to an increase in major convention activity in the city. 34 conventions are estimated responsible for 657,000 hotel room nights, a 64% boost from 2024. With the average revenue per room up 6% compared to last year as well. And this is actually the opposite of what we're seeing nationally where hotel occupancy is actually down 0.7%. We have a rise in conference bookings with commitments from Dreamforce, RSA Cybersecurity, Microsoft Ignite, OpenAI Dev Day, Config, Visa Payments Forum, and a lot more. And that's leading to projected rise in visitorship and tourist spending in 2026, up to 24 million and $9.83 billion of spending. All that's great news, but it's not all roses. International travel is expected to fall in large part due to broader geopolitical concerns and uncertainty. But notwithstanding that drop in international tourism, we're still expecting a rise in overall tourism, which underscores the amount of domestic travel that's happening in San Francisco right now. And that's all happening because perception of San Francisco is improving with falling crime, falling homelessness, an increase in the number of events that are happening throughout the city, all of which I'm going to talk about in a few minutes. Another effect of that rise in tourism and a return to office in San Francisco is an increase in retail presence and hospitality presence throughout the city. Just like with office, storefronts got absolutely hammered between 2020 and 2022. By Q1 of 2024, Union Square alone hit over 20% retail vacancy, and the citywide retail vacancy reached almost 8%, which is well above the national average. National chains pulled out, small businesses pulled out, foot traffic lagged because of the things that I talked about earlier— falling commutership, falling tourism. But we're starting to see a reversal of the exodus of retail as well as tourism and workers come back to the city. As of Q2 2025, according to Cushman Wakefield, SF's retail vacancy fell to 6.9% with the third straight quarter of positive net absorption, aligning pretty neatly with the three quarters of positive absorption in the office market. Many legacy stores like Saks, Nordstrom, and Bloomingdale's have left the city, but we're seeing a resurgence of higher-end experiential retail spaces coming back, even in Union Square, but also in other commercial areas like Fillmore, Chestnut, and Union Street. And believe it or not, we're actually seeing this a lot in Union Square. Specifically Brunello Cucinelli, Goyard, Hermès, Patek Philippe, Rolex, Breitling, Nintendo, Zara. All of them have recently opened or expanding into new spaces in the Union Square area, and they're performing incredibly well. New communities like Mission Rock, Pure/70, and Thrive City, and iconic destinations like the Ferry Building and Fisherman's Wharf are adding great new food and beverage concepts ranging from like Michelin-level to casual. There's still a ton of work to do for sure. Powell Street, for example, has a staggering 70% vacancy rate, but the city's very aware of that and they're working hard to fill it, doing creative lease subsidy programs to get new businesses there. And they're doing a complete overhaul to the Powell Street corridor to hope and generate more traffic to the area. The Vacant to Vibrant program has been implemented with a ton of success, getting a lot of businesses to open up experimental pop-up versions of storefronts on like trial short-term lease periods. And a lot of them have ended up signing long-term leases in their new location. Because of the success they've seen. And there are a ton of new events that are bringing more foot traffic and bolstering the retail and hospitality businesses, especially near downtown. Union Square, for example, engaged a third party to implement 200 Days of Programming for Union Square— free concerts, movies, arts and crafts, lunches, and other events to bring people back to the area. The city has enacted a series of laws implementing what are called entertainment zones, basically spaces outdoors where restaurants can serve alcohol outside during designated times. And in conjunction with those, the city's hosting what's known as Downtown First Thursdays, where they hold an event the first Thursday of every single month, whether it's, you know, free concerts or holiday-themed parties like for Halloween or St. Patrick's Day. And those have been a boom to local businesses that sponsor those events. And nobody would be coming to these things and visiting our retail hubs in our downtown if they didn't feel safe. And there's been marked improvement in San Francisco street safety, specifically with crime and homelessness. Crime patterns, like everything else, flipped in 2020. Burglaries rose, auto thefts rose. It was mainly property crime. San Francisco hasn't really been like a hub of violent crime, mainly property related. And those numbers are down big. Through the end of June 2025, burglaries are down 30%, motor vehicle theft is down 43%, robbery is down 20%, homicides are at a 60-year low. And it's not just crime that's down. A ton of work has been done to clean up the streets from homeless encampments after a recent Supreme Court ruling allowing cities to enforce their anti-encampment laws. The citywide tent peaked in April of 2020, but as of June 2025, it's the lowest we've seen since 2019. More people are being placed in shelters, and the city is more strictly enforcing those anti-encampment laws to keep the streets cleaner and safer. And all of these factors together are causing a renewed surge in housing demand, both on the rental front and in the home purchase market. In early 2021, San Francisco rents had fallen about 24% year over year, the steepest drop of any— major city in the United States. Professionals left the city, demand collapsed. People just didn't need to live near their offices anymore, and they were in search of more space, room for at-home offices, and more access to outdoors. But fast forward to 2025, occupancy has tightened and demand has surged. August 2025 saw San Francisco's median apartment rent hit over $3,000, up 11.5% year over year, the fastest growth among major US cities according to The Apartment List. Zumper's live tracker shows over 3,400 a month month, median across unit types. So even higher. I don't handle rentals personally, but a colleague of mine at my company who does got a few renters into several places a few weeks ago, and she told me that each of those places had over a dozen applicants, and one of them had over 40 applicants. And overbidding is back in the rental market as well. In fact, I helped a client buy a house in Kentfield in Marin County, and so they were moving out of their condo in Jordan Park in San Francisco to Marin, looking to rent their condo instead of sell it because the rental market is on fire right now. And before it came on the market, they received an over-ask offer. So it is very, very high demand for rentals right now in the city because of all the people moving back here and the trends that we're seeing. And this rising rent is putting upward pressure on the multifamily market, which took a major hit during the pandemic. So far this year, 2025, compared to the same period in 2024, the price per unit is up for 2 to 4 unit buildings and 5+ unit buildings, and the number of sales of 2 to 4 unit buildings and 5+ unit buildings is up as well. There was a duplex on the market in my neighborhood in Pacific Heights. It was vacant so the new owners could, you know, put in place market rents whenever they decided to rent it out. And it was basically move-in ready. It received over 40 offers and went for over $1.5 million above ask. So there is a ton of demand in the multifamily space right now for the right properties. I sold a 5+ unit building earlier this year, also in Pacific Heights, sold in 6 days with 2 offers. There's a lot of demand for multifamily housing right now. And it's not just for rentals. We're seeing that increase in demand on the purchase side as well. Effective inventory levels, meaning the number of homes available in relation to the number of buyers looking is falling. We have substantially more people looking compared to what's available than we did during the pandemic. And that's true even for condos, not just single-family homes. The percentage of homes cutting their ask price is lower than it was the same time last year. The percentage of homes selling for above ask is up compared to the same time last year. And we have a higher percentage of homes selling generally than the same time last year. Just a few examples. There was a single-family home in the Marina that was listed for $2.9 million, got 7 offers and sold for over $3.7 million. There was a fixer-upper in Pac High Heights that was listed for $1.9 sold with 6 offers for over $2.6 million. So there is a ton of demand for purchases just like there is for rentals. And interest rates have only just started to fall. At the time I'm making this video in the middle of September of 2025, the national average is about 6.3%, a little bit lower than what we saw the same time last year, but before the next Fed meeting where they're expected to implement their next rate cut. And what we've seen traditionally is that when interest rates fall, demand picks up. That's already starting to happen and it's going to continue to happen, especially if the trends we're seeing in the city more broadly continue. And that's largely because we don't have enough housing being built. The lack of supply combined with increasing demand is what's keeping significant upward pressure on rents and home prices. We are far behind on our state housing mandate, and the city has done a pretty good job removing a lot of historical roadblocks to getting things through the permit process to streamline the development process. But they can't really do anything to change the financial markets. We're in one of the toughest financial markets we've ever seen, and construction costs are near all-time highs. So it's just not a very friendly environment. environment for development right now. And that means we don't have enough housing being built to address the surge in demand. Bottom line, if the trends we're seeing continue, expect continued upward pressure on rents and home prices. We're still not quite back to the pandemic peak, but we are getting there. We're getting closer every single day. That's true for retail. That's true for office vacancies. That's true for tourism. That's true for crime. That's true for homelessness. Every single metric that took a hit during the pandemic is starting to reverse course and head in the right direction. If you want to keep up to date on what's happening in San Francisco, current events, new developments, developments or all things San Francisco real estate, make sure to subscribe to my channel because I make videos about that stuff every single week. And if you're thinking about relocating to the city and want to learn more about what's going on in our market in light of all these changes, reach out to me. I've lived in San Francisco for over 13 years and I've helped numerous people relocate here from all over the country. I'll put my contact info in the description below. Reach out anytime. And before you go, check out some of the videos that I've made on exciting new developments happening all over San Francisco. I've got several of them. I'll link them in the description below. Go check them out. I hope you enjoyed and I'll see you in the next one. [FOREIGN LANGUAGE]