Fifteen percent of Americans are hoping to buy a home in 2025, the highest number since NerdWallet began their survey in 2019. Unfortunately, some of this year’s homebuying hopefuls are likely to be let down. Nearly one-in-six (15%) adult Americans equates to about 39 million people. But since 2020, around 4.9 million existing homes have been sold each year, on average (NerdWallet).
San Francisco Months of Supply Inventory
San Francisco is a strong sellers' market right now. With only 1.1 months of supply for single-family homes and 2.8 months for condos, there aren’t enough listings to meet demand. Since a balanced market in California usually has about three months of supply, buyers are facing tough competition, likely leading to higher prices and fewer chances to negotiate.
Mortgage Rate Projections
Still waiting for lower mortgage rates? Here’s what you need to know. The latest expert forecasts say rates are expected to settle around 6.5% by the end of this year. And that means that they’re not expected to drop as much as you may have hoped. If you need to move, options like buydowns, adjustable rate mortgages, assumable loans and longer term loans can help homeownership be more affordable right now (Keeping Current Matters). And if you have a home to sell but are cash-strapped before your next purchase, talk with us about our great bridge loan options.
Scarcity of Inventory in San Francisco
In 2024, active inventory was a huge issue for the San Francisco market. There simply weren’t enough homes on the market to satisfy the demand. Unfortunately for buyers (fortunately for sellers), this issue looks like it will continue to persist in 2025. In the single-family home market in January, we saw 18.38% more new listings, 34.07% more sold listings and 10.34% fewer active listings on a year-over-year basis. In the condo market, we saw 12.62% more new listings, 17.71% more sold listings and 10.91% fewer active listings on a year-over-year basis in January.
Single-Family Home Prices in San Francisco
While varying sources will offer varying percentages, one thing is clear: the median price of a single-family home in San Francisco has increased year-over-year from January 2024. Per Realtors’ Property Resource (from public records and listings), there has been a 3.8% increase in value in the last 12 months with a January median price of $1,500,560. (Realtors Property Resource, Public Records)
Prices Per Square Foot for Homes in San Francisco
While it’s too early to predict how this metric will play out in 2025, if inventory remains constricted, we would assume that this will continue to bode well for sellers in San Francisco. In January 2025, the median price per square foot for a single-family home was $1,031, up 5.7% from the prior month (although that can partly be attributed to sales seasonality). It’s also up from the January 2024 median price per square foot of $968. (Realtors Property Resource, Public Records)
Condominium Prices in San Francisco
As with single-family homes, different sources provide different data, but all sources show condo prices also on the rise, year over year. Per Realtors’ Property Resource (from public records and listings), there has been a 2.2% increase in value in the last 12 months with a January median price of $1,022,310. (Realtors Property Resource, Public Records)
Price Per Square Foot for Condos in San Francisco
While we’re seeing more sales activity with condos, the price per square foot is down year over year to $924. That may be attributable to sales seasonality, so we’ll keep an eye on this line to see how the spring season unfolds. (Realtors Property Resource, Public Records)
Multi-Family Prices in San Francisco
Unlike single-family homes and condominiums, the multi-family properties have seen a dip in median value, at $1,721,000, which reflects a 6.8% decrease year-over-year (and the lowest value since August 2017 when it was $1,566,390). Elevated interest rates can be challenging with investors and multi-family owners, per the JP Morgan multi-family market update. And the cost of ownership has grown with insurance rates on the rise as well as general repairs and maintenance. (Realtors Property Resource, Public Records)
Overall Housing Sentiment Ticking Up Despite Affordability Concerns
Fannie Mae’s “Home Purchase Sentiment Index” increased 0.3 points last month to 73.4, which signals improvements in consumer optimism toward both home buying and home selling conditions, along with expectations that home prices will rise over the next year. The HPSI results are from Fannie Mae’s monthly survey assessing consumer sentiment toward owning and renting a home (currently, there’s a sharp increase in the number of respondents who believe that rental prices will increase in 2025), the current state of their household finances, views on the U.S. housing finance system and overall confidence in the economy.
Buyers Are Coming Back To Cities
After years of suburban and rural migration during the pandemic, cities have been making a comeback in the past couple of years. According to the National Association of Realtors (NAR), the percentage of people moving to cities has risen to 16%, the highest level in a decade. (Keeping Current Matters)
