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January 17, 2023

Market Update: Two-Unit Buildings

1378-80 16th Ave Exterior

The two-unit building—sometimes referred to as a duplex—is always in demand in San Francisco. That’s because there are more use options than, say, houses or condos. And that translates into a larger buyer pool. Two-unit building values tend to hold up well, even in softer markets.

The current two-unit market is very stable. 165 properties sold from June-December 2022 at a median price of $1.9M. The average price per square foot was $758.

Neighborhoods that saw the highest number of two-unit sales were Noe and Eureka Valleys, the Mission, Inner/Central Richmond and the Inner/Central Sunset. Almost 40% of buyers paid more than the list price, and about a dozen buyers overbid by 20% or more. 16% of sales closed for all cash.

What types of two-unit buildings attract buyers in droves? Large, vacant ones are the holy grail. TIC partners, owner-occupiers seeking rental income and pure investors all flock to these buildings. TIC partners will typically end up going to the mat for vacant properties with units of a similar size. That’s because such a setup lays the groundwork for owner occupiers and the condo conversion process, which results in each buyer ultimately owning a condo. An example of frenzied activity for two units was 1378-1380 16th Avenue in the Inner Sunset (photo above courtesy Brava Real Estate). The building offered two large, vacant units and was listed for $2,098,000. The property sold to TIC partners for $2,605,000 in October.

Buildings that are legal two-unit buildings but look more like single-family homes are also in demand for buyers looking to own a home with guest or au pair quarters. This setup usually involves a main house and a smaller, garage-level unit. Lots with a building at the front of the lot and one at the rear are also popular. These are fairly common in San Francisco and buyers like the house-like feel of a freestanding structure for privacy purposes.

Two-unit values hang on a few key factors—number of units vacant, tenant profiles, overall size and condition, parking availability and of course, location.

Don’t hesitate to get in touch with me if you’re in the market for a two-unit building, or interested in selling one. I’ve been a two-unit owner and landlord for 25 years, and have successfully sold many such buildings over the years. I’m happy to chat about your goals anytime. You can reach me at 415.823.4656 |

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