The San Francisco Real Estate Market: Everything You Need to Know

San Francisco is known for having one of the most competitive housing markets in the country. Overall, the San Francisco Bay Area has always been a topic of interest, and due to the recent slowdown in the median sales price, it's now becoming the target of many buyers who want to invest in this area.

Now, it's important to note that, while San Francisco home prices are going down, this still remains one of the most expensive real estate markets, so investing won't be easy, especially for those looking for affordable housing.

Do you want to learn more about the San Francisco housing market? Keep reading this article for all the information you should know!

Key Trends

The following trends and statistics will tell potential buyers everything they should know about the real estate market in San Francisco:

Median Sale Prices

The median price in housing units in San Francisco is $1,350,308, which suggests a 10.9% decrease in house prices compared to last year. In 2022, homes had a median price of $1.4M.

Number of Homes Sold

The number of homes sold in San Francisco is currently at 420 compared to 663 last year. This implies a 36.7% decrease.

Median Days on the Market

Typically, homes in the SF bay area sell after 29 days on the market. Last year, they took 15 days on average.

Competitiveness

Considering all the data we just mentioned, we can say that San Francisco's market is very competitive. Currently, the sale-to-list price got down by 9.19 pts, and it's at 103.1%.

On the other hand, 46% of homes sold above their list price, and 20.9% of homes sold below the list price during the same period.

What Factors Affect the Housing Prices?

There are a few factors that could affect housing prices and home sales in Bay Area counties, including San Francisco.

Economy

San Francisco's economy could have an effect on the housing market (and it's often the most important indicator). Today, for example, home prices are lower than last year, which represents an opportunity for those willing to buy and not sell.

Demographics

Demographics can play a significant role in how house values increase or decrease over a particular period. Some common demographic factors that can affect the market include a person's income, age, race, gender, and more.

Government Intervention

Sometimes, government interventions can have an effect on San Francisco's market (and other markets too). These include tax credits, decisions, and more.

Mortgage and Interest Rates

Mortgage and interest rates should always be a key factor in your decision. The increasing rates, overall, could suggest a challenge for those who want to buy, but since home prices are going down and there's more inventory on the market, this could be an excellent opportunity for those who want to invest.

Is the Real Estate Market Likely to Crash Soon?

Even though it's unlikely that San Francisco could go through a major, negative market adjustment without the influence of external factors outside of the local ones, it's safe to say that home prices are likely to keep falling, which isn't the case of other places in the Bay Area that have already stable values.

One of the reasons why the market is slowing down so much is the increase in mortgage rates, which have put off some potential buyers. However, if you were priced out of the market before, this could be the perfect opportunity for you to buy.

It's essential to understand the difference between a market that's slowing down and a crash. In this case, we believe this downward trend in San Francisco suggests a slowdown and not a crash, as there are still several opportunities for those who want to buy. Still, keep in mind that the housing demand in San Francisco is also getting lower.

Overall, this could be an excellent opportunity to lock in a mortgage rate before it rises further.

Statistics to Keep in Mind

Here are some key statistics you should keep in mind about San Francisco:

• Despite the recent decline in prices, the median sale price is still over a million dollars, which is almost a million more than the overall national median.
• San Francisco's real estate appreciated 111.65% over the past decade, which suggests an average annual home appreciation rate of 7.79%.
• 76% of homebuyers in San Francisco looked to say within the metropolitan area in early 2023.
• 24% of homebuyers in San Francisco wanted to move out of the city in early 2023.
• On average, homes in San Francisco receive up to three offers and sell in around 26 days or more.

Popular Predictions About the Housing Market

Keep in mind the "Bay Area," which includes counties like San Jose, Solano, Alameda, San Francisco, and others, is still ranking among the most expensive markets in the housing industry, so making general predictions can be trickier than with other areas.

Speaking about San Francisco particularly, we could say that home prices may keep their downward trend into 2024, as the market is still cooling from the hot competition over the past few years.

Other than that, while experts are claiming that prices could still get lower, there aren't any signs of a potential market crash any time soon.

Should You Invest in This Housing Market?

Buying conditions are more than favorable in San Francisco today, as home prices continue to decline, inventory on the market keeps increasing, and competition is balancing out.

However, remember that we're talking about the most expensive housing markets in the country, so if you want to invest in San Francisco real estate, make sure you prepare accordingly and set a realistic budget that meets your needs.

FAQs

Are Housing Prices Going Up in San Francisco?

Currently, home values are not going up in San Francisco, which suggests more opportunities for those who want to buy today.

Is San Francisco a Good Place to Buy Real Estate?

Considering the data in this article, we could say that San Francisco's housing market could be appealing to many buyers. However, before becoming a real estate investor in San Francisco, we suggest you evaluate all your options carefully to avoid problems or bad decisions.

Are Prices Likely to Drop in San Francisco?

The median sale price has decreased by a lot in San Francisco, and according to data, home values are still expected to go lower over the following months.