As we move into 2025, San Francisco’s housing market is showing both familiar and evolving trends. While mortgage rates have inched back up, there are signs that affordability may improve in the coming months. Let's dive into the national landscape and what’s happening right here in San Francisco.
The Big Story: National Market Update
Mortgage rates have climbed back to levels seen before the Federal Reserve’s first rate cut in September. However, despite these increases, there has been a slight improvement in affordability year-over-year, with the median monthly principal and interest (P&I) payment down by 1.84%.
Another key trend is the growth in housing inventory, which is outpacing existing home sales by about 7%. This could lead to increased affordability in the coming months as buyers have more choices, helping to ease some of the pressure on pricing.
At the same time, national home price growth has remained relatively flat since late summer 2024, according to CoreLogic Chief Economist Selma Hepp. While prices are expected to rise this year, most markets will see a slower pace of growth, which is good news for buyers who are budgeting and saving for down payments.
The Local Lowdown: San Francisco’s Housing Market
The January Drop-Off: Prices Take a Dip
After holding steady through Q4 of 2024, median sales prices in San Francisco took a notable dip in January. The numbers tell the story:
Single-family home median price: Down 9.68% to $1,422,500
Condo median price: Down 8.76% to $990,000
These declines reflect the high borrowing costs that continue to shape buyer demand. While San Francisco’s market remained strong despite the Fed's recent rate cuts, the effects of higher mortgage rates are now being felt in pricing adjustments.
Single-Family Homes Are Still Selling Above Asking Price
Despite the price dip, San Francisco’s market continues to defy expectations. With median prices down nearly 10% year-over-year, you might assume that homes are selling below asking price—but that’s not the case.
Single-family homes are still selling for 105% of asking price on average.
Condos, however, are selling at around 96% of their original list price.
This trend suggests that while home prices have adjusted, demand remains strong—especially for single-family homes, where buyers are willing to pay a premium in competitive bidding situations.
Inventory Challenges Persist in 2025
San Francisco has been dealing with a housing shortage, and this issue hasn’t gone away in 2025. Inventory remains low, making competition fierce among buyers.
January Year-Over-Year Trends:
Single-family homes:
18.38% more new listings
34.07% more sold listings
10.34% fewer active listings
Condos:
12.62% more new listings
17.71% more sold listings
10.91% fewer active listings
While more homes are hitting the market, the number of active listings remains low, keeping the seller’s advantage strong.
San Francisco Is Firmly a Seller’s Market
One of the key metrics in real estate is Months of Supply Inventory (MSI), which tells us whether a market favors buyers or sellers:
Less than 3 months of inventory = Seller’s market
More than 3 months of inventory = Buyer’s market
Right now, San Francisco is deep in seller’s territory:
Single-family homes: 1.1 months of inventory
Condos: 2.8 months of inventory
With demand significantly outpacing supply, buyers are facing an uphill battle in securing properties—especially in the single-family home market.
What This Means for Buyers and Sellers
For Buyers:
Higher mortgage rates are still a challenge, but home prices have come down—making this a good time to negotiate, particularly on condos.
Inventory remains low, so act fast when you find a home that fits your needs.
Expect competition for single-family homes, which are still selling above asking price.
For Sellers:
San Francisco remains a strong seller’s market, especially for single-family homes.
Pricing strategically is key—while the market is competitive, buyers are more price-sensitive due to high borrowing costs.
Condos may require a more aggressive pricing and marketing strategy to attract buyers in a slightly softer segment.
Looking Ahead
While mortgage rates remain high, inventory growth and moderating home price appreciation could help balance the market in 2025. For now, San Francisco remains a strong seller’s market, particularly for single-family homes.
If you’re considering buying or selling this year, reach out to discuss the best strategy for navigating the market. With expert guidance, you can make informed decisions in this ever-evolving real estate landscape.
*Unless otherwise indicated, all information is obtained from the San Francisco
Multiple Listing Service/InfoSparks. This information is deemed reliable, but not guaranteed.
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