In the ever-volatile world of the Bay Area’s housing market, San Francisco’s real estate scene has been nothing short of a rollercoaster ride.
After several months of uncertainty, it appears that home values are on the upswing across the Bay Area. However, San Francisco has taken a different path. The city’s housing market has remained in a state of inertia, with the median home value hovering at roughly $1.26 million as of September—unchanged from its value six months prior in March.
San Francisco, long known for its sky-high real estate prices, has been outperformed by another city in the Bay Area: Fremont. In early 2022, Fremont seized the crown as the most expensive city in the Bay Area, dethroning San Francisco. The baton was then passed to San Jose in July 2023, solidifying San Francisco’s fall from the top spot.
While San Francisco is treading water, cities in the East and South Bay are witnessing an upturn in home values, defying expectations, despite the lingering impact of high interest rates from the previous year. And yes, I’m loving every bit of the East Bay uprise because… I love, live and work in the East Bay.
Before you contemplate a move to San Francisco, keep in mind that you’ll need an annual income of at least $400,000 to afford the typical home in the city and neighboring San Mateo County. This has prompted many prospective buyers to look elsewhere for their dream homes.
The driving force behind this trend? Interest rates. Buyers are becoming increasingly discerning, insisting that their potential homes be nothing short of perfection to justify the hefty monthly mortgage payments. It’s technically not a full buyer’s market yet, but buyers aren’t willing to settle for less.
For San Francisco sellers, there is hope yet. Homes that boast the full package—renovations, breathtaking views, and electric vehicle chargers—still command the market, often selling within a week or two. However, properties that don’t meet these lofty standards may need more patience. In September, San Francisco properties spent an average of 33 days on the market, five days longer than the California average.
I highly recommend sellers consider adjusting their prices if their properties don’t see action within 30 days. This could be the key to attracting potential buyers. However, some sellers are holding their ground on pricing and finding success, it truly depends on your time frame and how long you feel comfortable sitting on the market as a seller. The only caveat to sitting on the market with no offers is no leverage, ultimately having little to no negotiation power.
In summary, this may not be the ideal moment to sell a home in San Francisco. Many buyers are broadening their horizons within the Bay Area, in search of more spacious properties at more reasonable prices a.k.a the East Bay.
As the saying goes, “San Francisco always holds a competitive edge.” Nevertheless, times are changing, and the housing market itself may need to evolve to meet the shifting demands of buyers. Finding the right equilibrium in this ever-evolving real estate landscape is the challenge at hand.