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A New Year Brings New Hope

Livability Up, Inventory Down: San Francisco at a Crossroads

The news just keeps getting better and better for San Francisco. A new 2026 livability report from RentCafe just named San Francisco the most livable metro area in California–and third in the nation overall.
 
The ranking is driven by what many residents already know well: exceptional access to healthcare, an abundance of parks and green space, short commute times, and one of the healthiest food and fitness ecosystems in the country. Nearly 99% of residents have access to exercise opportunities, and the city boasts a high concentration of healthcare providers and low uninsured rates–making San Francisco especially appealing to active, health-conscious households. One interesting data point: San Francisco has the lowest number of sick days per month (3.8) across any metro area in the state.
 
The report also points to San Francisco’s cultural pull. With its vibrant arts scene, social clubs, restaurants, and entertainment options, the city continues to attract young professionals and “social butterflies” who value connection and lifestyle as much as career opportunity.
 
The trade-off, unsurprisingly, is affordability. While San Francisco excels in quality-of-life metrics, it ranks much lower on socioeconomic measures–reflecting the ongoing challenge of high housing costs and rising rents. More on that in the charts below.
 
The takeaway? San Francisco’s enduring appeal–its parks, wellness infrastructure, and active urban lifestyle–continues to support strong demand, even at premium price points. For many residents, the lifestyle remains worth it.
 

A Plea for More Housing

San Francisco’s inventory shortage has sharpened dramatically. As of this writing, just 138 single-family homes are available citywide–down from 433 at the same point last year, a decline of nearly 70% year over year. Condos and small multi-unit properties are tracing a similar path, underscoring a supply contraction that spans all major housing types.
 
The forces behind this imbalance are well known. Many homeowners remain effectively “rate-locked,” sitting on mortgages in the 3-4% range and understandably reluctant to trade them for today’s higher borrowing costs. At the same time, buyers–having adjusted to the current rate environment–are re-engaging with urgency. With San Francisco rents still near cycle highs and competition for quality rentals intensifying, more households are opting to buy, only to encounter historically thin inventory and the reemergence of multiple-offer scenarios.
 
The result is a familiar but increasingly acute dynamic: demand returning faster than supply. Whether one supports or opposes Daniel Lurie’s upzoning proposal, the underlying reality is difficult to dispute. San Francisco is facing a severe housing deficit across virtually every price point, and without meaningful additions to supply–both for sale and rental–the pressure on prices and rents is likely to persist.
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Put simply, San Francisco needs substantially more housing—across all types—and it needs it now.
 

The Data

San Francisco’s Ranks High for Quality of Life
San Francisco ranks #3 nationally for quality of life, according to RentCafe’s 2026 report–outperforming much larger metros thanks to access to healthcare, parks, and an active, urban lifestyle. The catch? Affordability remains the trade-off. (RentCafe)
 
Rental Prices Rising
San Francisco rents continue to climb. The average apartment now rents for $3,561, up 5.5% year over year, while one-bedroom units have jumped more than 15%, reflecting especially strong demand in the city’s most popular rental segment. Studios remain the most affordable option at $2,536, while one-bedrooms average $3,389. Two-bedroom apartments command $4,582, and three-bedroom units average $5,671. The takeaway is clear: rental pressure remains elevated, reinforcing why more renters are exploring ownership as a long-term alternative. (RentCafe)
 
 
More Renters Than Owners
San Francisco remains a renter-heavy city. Approximately 62% of households–about 223,000 homes–are renter-occupied, while just 38% (roughly 140,000 households) are owner-occupied, underscoring the city’s long-standing imbalance between renters and homeowners. Rental costs vary widely by neighborhood. The most affordable area– including the Tenderloin ($2,071/month), Downtown District 8 – Northeast ($2,412), and North Waterfront ($2,785)–all fall well below the citywide average rent of $3,561. At the other end of the spectrum, premium neighborhoods such as Presidio ($5,375), Nob Hill ($4,458), and Russian Hill ($4,430) command the highest rents, driven by location and sustained demand. Many neighborhoods–including Mission Bay, Potrero Hill, South Beach, Hayes Valley, and Dogpatch–now cluster near or above the $4,000/month mark, reinforcing the growing financial pressure on renters across the city. (RentCafe)
 
 
Current Mortgage Rates
Mortgage rates have hit their lowest point in 3 years. The 30-year fixed-rate mortgage sits at 6.09% for the week ending January 22, 2026, while the 15-year fixed-rate mortgage is at 5.44%, considerably below where they were last year at this time (6.96% and 6.16%, respectively). (Freddie Mac)
 
Mortgage Rate Trends
Mortgage rates didn’t move in a straight line in 2025, but the direction mattered. The 30-year fixed rate trended lower over the year, improving affordability and bringing more buyers back off the sidelines. (Keeping Current Matters, Freddie Mac)

 

 
San Francisco Median Prices
The San Francisco housing market closed out 2025 with impressive year-over-year gains in median sale prices. Single-family homes saw an 8.63% increase, with the median home selling for $1,662,000. Condos also performed well, with the median sale price increasing by 5.21% to $1,075,000. Single-family homes continue to command significant premiums, with the average home selling for nearly 13% over the original asking price. Meanwhile, condos are selling right around their asking prices at 98% of list price.
 

 

Inventory Hits Rock Bottom as Few Single-Family Homes Remain on the Market
San Francisco is experiencing an unprecedented decline in housing inventory. There are currently just 138 single-family homes for sale across the entire city, representing a nearly 70% year-over-year decline. The condo market has seen a similar contraction, with only 290 condos and 47 TICs currently available. Combined, this leaves just 472 homes for sale in San Francisco, making it extraordinarily difficult for buyers to find suitable properties. Until more homeowners choose to list their homes, this severe inventory shortage will continue to define the market.
 

 

San Francisco has Become One of the Tightest Seller's Markets in the State
When determining whether a market is a buyers’ market or a sellers’ market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a sellers’ market, whereas markets with more than three months of MSI are considered buyers’ markets.
 
With just 0.5 months of single-family home inventory and 1.2 months of condo inventory on the market, San Francisco has become a deeply entrenched seller's market across all property types. These are some of the lowest MSI figures we've seen in years, and there is no indication that conditions will ease for buyers any time soon. Until significant new inventory enters the market, sellers will continue to hold all the cards in San Francisco.

 

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