San Francisco December '24 Real Estate Update Ascend RE

The Local Lowdown

Quick Take:

The median single-family home price rose 7.7% month over month, while condo prices increased 9.2%. We expect prices to contract over the next three months, which is the seasonal norm.
Total inventory declined 11.0% month over month, as new listings declined and sales spiked, which is common for San Francisco in October. We expect inventory to decline and the overall market to slow through January 2025.
Months of Supply Inventory declined in October. Currently, MSI remains under three months of supply for single-family homes, indicating it’s still a sellers’ market, while condo MSI continues to indicate a buyers’ market.

Median home prices increased month over month and year over year

In San Francisco, home prices stabilized after a correction in mid-2022. Single-family homes peaked at $2.05 million in April 2022, but prices dropped as mortgage rates rose. Since August 2022, median prices have remained around $1.6 million for homes and $1.1 million for condos, with year-over-year increases of 6% and 12%, respectively. More sellers entered the market in September, pushing prices higher. While high mortgage rates have slowed both supply and demand, buyers and sellers have adapted to rates near 6%. However, with rates rising closer to 7% in October, sales are expected to slow in November.

Sales spiked in October, while inventory and new listings fell

In October, sales rose 52% after a surge in new listings in September, which nearly doubled from August. Sales are up 18% year-over-year, while inventory is down 13%. Inventory has been declining since 2010, with a sharp drop from October 2020 to December 2021, and has stabilized at lower levels since. Low inventory and high mortgage rates have slowed the market. In 2024, inventory, sales, and listings are expected to follow typical seasonal patterns but at lower levels, with tight supply likely until spring 2025.

Months of Supply Inventory in October 2024 indicated a sellers’ market for single-family homes and a buyers’ market for condos

MSI measures how long it takes to sell current listings at the current sales pace. In California, an MSI of three months indicates a balanced market. Below three favors sellers; above three favors buyers. San Francisco’s single-family home MSI has stayed under three since October 2023, reflecting a sellers’ market. Condo MSI indicates a buyers’ market.

The Bottom Line

San Francisco’s housing market remains dynamic, shaped by high mortgage rates, tight inventory, and shifting buyer and seller behavior. While median home prices have stabilized since mid-2022, recent increases highlight the market's resilience, especially for single-family homes. Sales surged in October 2024 despite rising rates, reflecting strong demand in a sellers’ market for single-family homes. However, condos remain in a buyers’ market, and inventory constraints continue to influence market trends. Looking ahead, typical seasonal patterns are expected in 2024, but low inventory and elevated rates will likely keep the market competitive, especially until supply increases in spring 2025.