Is San Francisco Real Estate Dropping?

San Francisco has long been recognized as a real estate market with exceptionally high costs, a reputation largely shaped by its robust economy and limited housing supply. This unique environment has consistently drawn significant public interest, prompting questions about its stability and future trajectory. Understanding the current dynamics of this market involves examining various factors that influence property values and transactional activity. This analysis aims to provide clarity on whether the San Francisco real estate landscape is experiencing a significant downturn, offering insights into its present condition.

Current State of San Francisco Real Estate

The San Francisco real estate market currently demonstrates competitive conditions, with recent data indicating an overall increase in median sale prices. As of June 2025, the median sale price for a home in San Francisco reached approximately $1.5 million, reflecting a 2.7% increase compared to the previous year. This figure suggests a resilient market, with the median sale price per square foot recorded at $962 in June 2025. The city’s median sale price significantly surpasses the national average, standing 217% higher.

Specific property types within San Francisco have shown varied performance in recent months. In June 2025, single-family home median sale prices rose by 4.42% year-over-year. Concurrently, condo median sale prices experienced a more substantial increase, rising by 10.52% over the same period. This indicates that while the overall market is appreciating, the condo segment, which had previously experienced some declines, is now showing strong recovery.

Looking back slightly, in May 2025, the median single-family home sold for $1,802,000, representing a 7.58% increase from the prior year. During the same month, the median condo sold for $1,298,000, which was an 8.26% increase year-over-year. These figures underscore a trend of rising values across both primary housing categories in San Francisco. The data, primarily sourced from local MLS systems and reputable real estate reports, provides a current perspective on market values.

Key Factors Driving Market Changes

Several significant factors influence the San Francisco real estate market, shaping its current trends and future outlook. Rising interest rates directly impact affordability, as higher rates increase the cost of borrowing for homebuyers. Mortgage rates have generally remained elevated, typically in the mid-to-high 6% range, which can temper buyer demand by making home financing more expensive. However, for properties exceeding standard loan limits, jumbo loans are common in San Francisco and can sometimes offer more favorable rates, ranging from 5.6% to 5.9%.

The technology industry plays a substantial role in the local housing market. While past tech layoffs influenced employment stability, the burgeoning artificial intelligence (AI) sector is now attracting new tech workers to the city. This influx of high-income professionals contributes to sustained housing demand. Furthermore, major employers like Salesforce, Uber, and Airbnb are increasingly mandating a return to office work, which is drawing more employees back into the urban core and increasing localized demand for housing.

Population shifts, including migration patterns, also contribute to market dynamics. Following a period where some residents moved away, San Francisco appears to be experiencing a shift, with fewer locals seeking to leave the city. This increased popularity among existing residents and the return of some tech workers are contributing to a more robust local buyer pool. The city’s unique blend of economic opportunity and limited space continues to attract and retain a strong residential base.

Understanding Property Type and Neighborhood Differences

The San Francisco real estate market is highly segmented, meaning that overall trends do not uniformly apply to all property types or neighborhoods. Price movements and market conditions can vary significantly between single-family homes and condominiums. While both property types have seen median price increases, their market dynamics differ notably. The single-family home market has consistently operated as a seller’s market.

In contrast, the condo market has shown characteristics of a buyer’s market for an extended period, though this has recently begun to shift. For example, single-family homes in June 2025 sold for an average of 112% of their original listing price, indicating strong buyer competition. Condos, however, sold for an average of 99.7% of their original listing price during the same period, offering slightly more negotiating room for buyers.

This distinct behavior extends to different neighborhoods within the city. Luxury homes, particularly in areas like Pacific Heights, have seen significant appreciation and rapid sales. Conversely, some downtown condominiums have experienced price drops and longer marketing periods, reflecting a more challenging environment for those specific properties. These variations underscore that local amenities, specific housing stock, and buyer preferences create diverse market conditions across San Francisco’s distinct neighborhoods.

Market Activity and Sales Volume

Beyond median prices, other indicators provide insight into the San Francisco real estate market’s activity and health. Sales volume, which measures the number of transactions, reflects the level of buyer and seller engagement. In June 2025, San Francisco recorded 495 homes sold, an increase from 399 sales during the same month last year. This upward trend in sales volume suggests an active market with increasing transaction levels.

Days on Market (DOM) is another key metric, indicating how long properties remain for sale before an offer is accepted. On average, homes in San Francisco sold after 24 days on the market in June 2025, a slight increase from 22 days last year. However, more granular data suggests single-family homes sell much faster, averaging just 14 days on the market, while condos take longer, averaging 31 days. These figures reflect varying buyer urgency across different property types.

Inventory levels, representing the number of available homes for sale, remain a significant factor in San Francisco. As of June 2025, there were 2,099 homes available for sale. Despite this, inventory for single-family homes decreased by 7.87% year-over-year, and condo inventory saw an even steeper decline of 18.77% in June 2025. This persistent low inventory, coupled with strong demand, means that properties generally sell at or above their asking prices, with homes selling for 2.38% above asking on average in June 2025.