San Francisco continues to operate with a level of momentum that feels increasingly distinct from the rest of the country, and it’s showing up clearly in the housing market.
The market here remains strong and fast-moving. In March, median single-family home prices reached $2.15M, the highest on record, surpassing the April 2022 peak of $2.05M. Condo prices followed closely at $1.35M, the second-highest ever after April 2022’s $1.375M median price. At the same time, the broader narrative around the city continues to shift in a noticeable way. Rents are at all-time highs (a recent KQED piece highlighted $700/month sleeping pods), and this week’s headline from The San Francisco Standard tells the story of empty nesters returning to San Francisco ahead of what many expect will be another wave of AI-driven demand.
That local strength stands in contrast to a more challenged national backdrop.
Consumer sentiment across the country has fallen to historic lows, as inflation rose from 2.4% in February to 3.3% in March, driven in large part by rising energy costs. Consumer debt now sits at a record $18 trillion, including $13 trillion in mortgage debt, and more than 5 million student loan borrowers are over 90 days delinquent. At a recent industry conference, economist Rick Sharga described current conditions as the “worst affordability” environment since 1981, with expectations for modest home price growth, fewer transactions, yet relative stability in mortgage rates.
Mortgage rates themselves remain unsettled. After dipping sub 6% earlier this year, they have moved back into the low to mid-6s, reflecting ongoing inflation pressures, uncertainty from the Federal Reserve, and broader global market dynamics. Rather than a clear directional trend, rates have been moving within a range, often shifting quickly.
Within that context, San Francisco continues to show unique dynamics. Cash remains a meaningful component of the market: of the 597 single-family home sales year-to-date, 182 were all cash (approximately 30%). At higher price points, that share increases to 49% of sales over $3M and 52% of sales over $5M. Activity in the luxury realm has also picked up, with 26 sales above $5M in March - the highest monthly total since November 2021.
Consumer confidence locally is holding, and with limited inventory, demand remains the driving force. Well-priced and prepared homes are attracting strong, often competitive interest. For buyers, the key is staying anchored in the most current data, recent sales and pending activity, not comps from even a few months ago.
