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An eclectic city known for iconic landmarks, cable cars and many well-known tech and software companies, San Francisco is the 13th largest city in the country. Unfortunately for its residents, the Bay Area is also known for being one of the most expensive places in the country to live.
It’s not just housing that’s expensive here, though. The overall cost of living, a figure that includes such things as utilities, healthcare and food, is a daunting 79 percent higher than the rest of the country. In fact, San Francisco was recently named one of the 10 most expensive cities in the world. Let’s take a closer look at the San Francisco housing market.
San Francisco housing market overview
Like the cost of living in much of California, life is just pricier in San Francisco. Of course, with all the tech jobs here — Apple, Google, Uber and many more huge corporations are based in the Bay Area, if not in the city itself — salaries are often higher as well.
And, like real estate in many other parts of California, home prices here are extremely high. The median sale price for a San Francisco home is a steep $1.35 million, according to March 2023 data from Redfin — that’s a far cry from the national median home price of $375,700. Even so, prices have begun to decline from their pandemic-era highs, and listings are spending nearly twice as long on the market than they did at this time last year.
San Francisco housing trends and stats
- Home prices were down 10.4 percent in March 2023 compared to one year earlier, per Redfin.
- Despite the decline, the median sale price was still $1.35 million — close to a full million more than the overall national median.
- The average number of days on market in March was 29. That’s 14 days longer than one year earlier.
- March’s sale-to-list price was 103.1 percent. While selling for 3 percent over asking price may sound good, it’s a 9.13 percent year-over-year drop.
- Closing costs in California typically come to about 1 percent of a home’s price, according to data from ClosingCorp.
Should you buy or sell in the San Francisco market?
If you’re a home seller
Sales have been slowing significantly in San Francisco, which is not great news if you’re considering selling your home here. Year-over-year sales volume is down 35.5 percent in the overall Bay Area and 37.9 percent in San Francisco proper, according to data from the California Association of Realtors.
Ongoing mortgage rate increases are one of the primary factors causing the market to cool so dramatically. Many potential buyers are being priced out of the market. If you’ve just begun thinking about listing, it may be best to act quickly, before interest rates go much higher and scare even more buyers to the sidelines.
As the numbers show, it’s still possible to attract a good price for your San Francisco home. But it’s more important than ever to understand what your home is worth in the current environment, and to adjust your expectations to reflect market realities.
If you’re a home buyer
While increasing mortgage interest rates are indeed a challenge for potential buyers, the slowing market presents a potential opportunity for those still shopping. Prices are coming down, and there’s less competition for homes — both good news for area homebuyers. There’s also slightly more inventory on the market, which makes conditions even more favorable.
Even as prices come down from their pandemic highs, San Francisco real estate remains extremely pricey relative to the rest of the country. It’s important as a buyer to focus on finding a home you can afford. Before setting out on a home search, nail down exactly how much you can borrow from a lender by getting preapproved for a mortgage.
San Francisco housing market predictions
While prices have certainly been declining in San Francisco, it’s not alone in that — the same holds true for many popular American cities, especially in the West. Experts don’t believe the real estate market is poised for a crash, though. Instead, it’s simply cooling from the unusually hot competition of the past few pandemic-fueled years. Many housing market predictions include home prices continuing their downward trend throughout the year, and potentially into 2024.
Find a San Francisco real estate agent
With the real estate market continuing to shift and evolve on a daily basis, it’s more important than ever to have an experienced real estate agent by your side. This is true whether you’re buying or selling. An agent who really understands the intricacies of your local market can help you navigate the current dynamics more successfully.
If you’re just beginning to search for an agent, consider asking friends or relatives who have had a good experience for a referral. You might also try looking online for an agent or contacting agents whose advertising you see in your local community.
FAQs
Yes. According to Redfin data, as of March 2023, San Francisco home prices were down 10.4 percent compared to the same time one year ago. However, don’t be fooled by the double-digit decline: The city’s median home price is still a very high $1.35 million.
No matter what city you’re searching in, the best time to buy a home is when you are certain you’re going to stay put for at least a few years and your budget can comfortably afford the expense. With that said, buying conditions are more favorable right now in San Francisco than they have been in a while, with home prices declining, more inventory on the market and less competition.
