Several factors are contributing to the renewed energy in our market:

  • Stabilized Market Conditions: Economic indicators and confidence in the local market are prompting buyers to re-enter the scene.

  • Attractive Financing Options: Flexible financing solutions, such as adjustable-rate loan products, are making homeownership more attainable.

  • Desire for Home Ownership: With employees returning to the office and lifestyle changes continuing to shape our priorities, many are seeking the stability and personal touch of home ownership in our iconic city.

Buyers are Back*

Buyer activity is making a strong comeback in the San Francisco market—here’s what you need to know. After a period of uncertainty, we’re seeing renewed interest and confidence among buyers, creating fresh opportunities for homeowners, investors, and first-time purchasers alike..

Here are a few key trends we're noticing:

  • Increased Buyer Activity: After the slowdown of 2023 and 2024, more buyers are stepping into the market, leading to busy open houses and the return of bidding wars. This includes buyers who are engaging with their brokers by signing a newly-required buyer-broker representation agreement before viewing homes via private appointment.

  • Competitive Pricing: While San Francisco remains a premium market, current pricing is encouraging buyers to explore other neighborhoods more within their price range.

  • Extra Preparation: Just because buyers are back does not mean that their standards have lowered. In fact, due to higher rates and decreased purchasing power, buyers have less liquidity to sink into a home after they’ve purchased it. Sellers need to polish their homes that much more to attract the desired bidding war.

*The real estate market changes quickly, and this information may become outdated. Please verify details and consult professionals for the most current insights.

Reflecting on San Francisco Real Estate 2024 

As we step into 2025, let’s take a moment to reflect on how the San Francisco real estate market closed out 2024. The market experienced some notable trends:

Median Prices Up: House and condo sales prices increased but remained well below the pandemic-era peaks of 2021-2022.

  • More Activity but Below Norms: New listings and sales rose compared to 2023, but volumes stayed below long-term averages.   Buyers were cautious about rates, and sellers hesitated to list

  • Overbidding Returns: Overbidding increased, with properties selling faster than in 2023—a sign of pent-up demand. Many agents priced strategically and buyers competed for limited inventory.

  • Seasonal Slowdown: December was predictably quiet, but optimism for the new year is bringing buyers and sellers back into the market.

“Mortgage rates fell for the sixth week in a row, offering some financial relief to prospective home buyers. The 30-year mortgage rate averaged 6.76% as of Feb. 27, the lowest rate in over two months.”

— Weekly data from Freddie Mac

One of the best hedges against inflation is buying assets that do better than the rate of inflation and protect your buying power. Purchasing a home, has proven to be better than the alternative of renting. 

If you compare the net worth of a renter vs a homeowner, the disparity has continued to grow:

2019:   Homeowner has 40x net worth of a renter ($295,500 vs $7300)

2024:   Homeowner has 42x net worth of a renter ($415,000 vs $10,000)

Insights for Sellers

  • Limited Inventory Creates Opportunity: Tight inventory means well-priced and prepared homes can attract competitive offers. Buyers are in the market and ready to act—what they need are homes to purchase.

  • Seasonal Peaks: Spring and early fall remain peak selling seasons, but early 2025 has already seen strong buyer demand. Preparing your home early will help you capitalize on these trends.

  • Neighborhood Trends:

    • Highest Median Prices: Pacific Heights and Presidio Heights saw the highest prices and price-per-square-foot values but had longer days on market.

    • Highest Sales Volume: Inner Sunset, Central Sunset, and Richmond led the market with 511 of 1,451 homes sold citywide in 2024.

Insights for Buyers

  • Affordable Neighborhoods Shine: Sunset led the pack—82% of homes sold above asking compared to 53% for all of San Francisco. Areas like Bayview-Excelsior and Bernal Heights also saw strong demand. 

  • All-Cash Offers on the Rise: All-cash buyers have an edge in competitive markets. With concerns about stock market stability, many are turning to real estate as a safer investment.

  • Navigating Interest Rates: Despite the Fed’s benchmark rate reductions in 2024, mortgage rates increased. With only two small rate cuts expected in 2025, buyers should plan for continued high borrowing costs. The bond market’s potential strengthening could impact rates further—making now a strategic time to buy.

  • Work with Great Lenders: We work with excellent lenders and mortgage brokers who can get you the best rates and tailor solutions to your needs. Have you heard about programs that reduce your rate if you hold funds at a bank?

Looking Ahead to San Francisco Real Estate in 2025

  • Seasonality: Spring is expected to be the busiest market season.

  • Price Trends: In 2024, 50% of homes sold were in the $1M-$2M range, with 77% under $2M and only 11% over $3M.

  • Diverse Price Points: 50% of homes sold last year were $1M-$2M. Some of the most affordable properties right now are condos, especially in Soma and Civic Center, where homes were selling for under $800 a square foot. Which is crazy because a few years ago, SOMA was in high demand.  For comparison,  Pacific Heights exceeded $1,200 per square foot.

While dramatic rate drops aren’t expected, limited inventory and strong demand suggest a promising start to 2025. Buyers and sellers should stay informed and work with experienced agents to navigate this dynamic market.

Final Thoughts 

Whether you’re buying or selling, 2025 offers opportunities amidst its challenges. Here’s a quick recap of the key trends shaping the market:

  • Mortgage Rates: These are Unlikely to decrease significantly, so buyers should plan for continued higher borrowing costs.

  • Home Prices: Holding steady or rising in many areas, reflecting strong demand. In general, the rise in home prices outweighs the increase in interest rates in San Francisco if you’re playing the long game.

  • Housing Inventory: Remaining tight and not meeting buyer demand, creating a competitive landscape,e especially in high-demand neighborhoods and price points.

Want to learn more?

Checkout San Francisco Housing Market Analysis & Forecast (2024 – 2025) from The Luxury Playbook