by Clay Gjevre
As we transition into fall, the San Francisco real estate market continues to evolve, offering both buyers and sellers unique opportunities. In this month’s update, I’ll be sharing key insights on home prices, mortgage rates, and inventory levels to help you better understand where the market stands and what to expect in the coming months.
Lower Prices and Mortgage Rates: A Win for Buyers
August 2024 brought some good news for potential homebuyers: mortgage rates have continued to decline. The average 30-year mortgage rate dropped to 6.35%, marking the third consecutive month of rate reductions. This drop, coupled with a 2.1% decrease in national home prices over the last two months, means the monthly cost of financing a median-priced home has become 8.3% more affordable since June.
The Federal Reserve is expected to cut rates further at its upcoming meeting in mid-September, which could offer even more relief for buyers. With sales already showing a 1.3% month-over-month increase, we may see more movement in the housing market as rates fall and homes become more affordable.
The Local Lowdown: San Francisco’s Unique Market Trends
In San Francisco, we’ve seen a similar trend with a notable decrease in home prices. The median price for single-family homes fell 4.9% month-over-month, while condo prices dropped by a more significant 20.9%. It’s not unusual for prices to contract as we head into the latter half of the year, but these declines are worth noting if you’re considering a move.
Inventory is also shrinking—down 9.7% in August—as sales and homes under contract have outpaced new listings. This is typical for this time of year, and we expect inventory to continue declining as we move into fall. For buyers, this means there are still options on the market, but acting sooner rather than later may be wise.
A Seller’s Market for Single-Family Homes, Buyers’ Market for Condos
If you’re looking to sell a single-family home, the current market continues to favor sellers. The Months of Supply Inventory (MSI) for single-family homes has been under three months for nearly a year now, which signals a strong sellers' market. However, it’s a different story for condos, where the MSI still indicates a buyers’ market.
For sellers, low inventory levels and steady demand should provide some price support in the months to come. On the other hand, condo buyers may find themselves in a favorable position to negotiate, especially as inventory remains higher in that segment of the market.
Looking Ahead to 2025: What to Expect
As we look toward 2025, the San Francisco real estate market is poised for a potential rebound. With mortgage rates expected to continue their downward trend, we could see more activity in the spring market next year. The current low inventory might help keep prices stable for the time being, but if more sellers bring their homes to market, it could drive competition among buyers, potentially raising prices.
For now, if you’re considering buying, it’s worth exploring your options with today’s improved affordability. And if you’re thinking about selling, now is a great time to take advantage of the low inventory and strong demand for single-family homes.
Conclusion: Time to Make Your Move?
Whether you’re looking to buy or sell in San Francisco, the current market offers opportunities on both sides. With mortgage rates dropping and inventory levels tightening, it’s an excellent time to assess your real estate goals.
If you have any questions about the market or want to explore your options, feel free to reach out. I’m here to guide you through these changing conditions and help you make the most of the opportunities in today’s real estate market.
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