January 2025 Market Deep Dive

Local Lowdown

Quick Take:

The median home price fell 2.5% month over month, while condo prices declined 4.3%. We expect prices to contract in January 2025 before rising into the spring.
Total inventory fell 50.9% month over month, dropping inventory to a record low. We expect inventory to continue to decline in January and the overall market to slow due to lack of supply.
Months of Supply Inventory plummeted in Q4 2024 due to the lack of inventory. Currently, MSI indicates a strong sellers’ market for both single-family homes and condos.

Median home prices declined month over month, but rose slightly for the year

San Francisco home prices have remained stable since the initial correction in mid-2022, with single-family homes averaging $1.6 million and condos $1.1 million. Despite rising mortgage rates, prices saw a 5% year-over-year increase for single-family homes but a slight decline for condos. Low inventory continues to support prices, as buyers can better find suitable homes. While mortgage rates fluctuated in 2024, the recent rise toward 7% is expected to slow sales further.

Sales far outpaced new listings in December, dropping inventory to all-time lows

Housing inventory has remained low since 2010, with a sharp drop from late 2020 to 2021 and stabilization at a depressed level since 2022. Limited new listings and high mortgage rates have slowed the market, with sales often outpacing supply. While 2023 lacked typical seasonal trends, 2024 is expected to follow historical patterns but at lower levels. In December, sales outpaced new listings, cutting inventory by 51%, though new listings were up 16% year-over-year, contributing to an 8% rise in sales. Tight supply is expected to persist until at least spring 2025.

Months of Supply Inventory in December 2024 indicated a sellers’ market

Months of Supply Inventory (MSI) measures how long it would take to sell all listed homes at the current sales rate, with three months indicating a balanced market. San Francisco’s housing market typically favors sellers, reflected in its consistently low MSI for single-family homes. Since October 2023, MSI has remained below three months, with fluctuations driven by new listings and sales activity. In Q4, sales outpaced new listings, causing inventory to drop and MSI to decline further. The current market strongly favors sellers.