SAN FRANCISCO REAL ESTATE MARKET UPDATE - August 2025

August 1, 2025

BUSINESS

SAN FRANCISCO REAL ESTATE MARKET UPDATE - August 2025

The Big Story

Quick Take:

Affordability remains an issue nationwide, as the median monthly P&I payment ticked up by 10.15% on a year-over-year basis at the end of April.
Mortgage rates have continued to hold the mid-six percent range that we’ve seen for over six months.
Inventories continue to climb throughout the country, while home sales start to slow down.
The recent global economic and geopolitical instability that we’ve seen likely won’t help the market, as uncertainty may lead people to stay where they are.

Note: You can find the charts & graphs for the Big Story at the end of the following section.

*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.

The housing affordability issue continues to grow

As we all know, housing affordability has been a problem on a national scale for quite a few years at this point. At this point in time, many find it hard to believe that the housing market will return to pre-pandemic levels in terms of affordability at any point in the near future. Unfortunately, things have not gotten much better, as the median monthly P&I payment increased by 10.15% on a year-over-year basis, to $2,182 in the month of April. This jump in P&I payment represents a drastic month-over-month jump of 3.46%. This jump is actually quite perplexing, as median home sale prices have increased by 1.34% on a year-over-year basis, while mortgage rates have actually come down.

Mortgage rates remain stagnant in the mid-six percent range

For the past few months, mortgage rates have remained fairly stable, in the mid-six percent range. Although the stability that we’ve seen is a good thing, the levels they’ve stabilized at are quite a bit higher than recent historical averages. This, of course, is one of the leading causes of the affordability issues that we’ve seen recently.

It is worth noting, though, that we might see some discounted rates toward the back half of the year. Although the Fed has not touched the federal funds rate in nearly a year, the Fed chairman has signaled that one to two rate cuts are expected by the end of the year, so long as there aren’t any further spikes in inflation.

Inventories are building at an incredibly rapid rate

What we have been seeing in terms of inventories in California has been echoed on a nationwide scale. Fewer homes are being sold, with 1.95% fewer existing home sales when compared to this time last year. At the same time, 9.95% more new listings have hit the market on a year-over-year basis. This has led overall inventory to increase by a whopping 20.31% on a year-over-year basis.

As inventories are piling up, negotiating power will slowly shift from the sellers to the buyers, as buyers have more opportunities, and don’t need to move nearly as quickly as they had to just a year earlier.

Global economic and geopolitical instability are making both buyers and sellers more cautious

In any market, but especially the real estate market, instability is incredibly detrimental. Given the recent rise in uncertainty around tariffs and employment, coupled with continued instability in Europe and the Middle East, both buyers and sellers have become much more cautious. Inventories are growing throughout California and the broader United States. However, for those who have the capital and a long time horizon, times like these can represent excellent buying opportunities, as good deals are easier to come by.

However, it’s important to note that this is just what we have been seeing at the national level. California markets have largely remained resilient, which we’ll delve into more in the local lowdown section below.

Big Story Data

The Local Lowdown

Quick Take:

Median sale prices continued to increase throughout San Francisco in the month of June.
Inventory continues to be a huge issue in San Francisco, as levels continue to dwindle.
Due to the inventory constraints in the area, listings are scooped up off the market at breakneck speed.

Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Condo values have increased by more than 10% over the course of the past year

Median sale prices have been on the rise over the past few months in San Francisco, and there was no exception in the month of June. Single-family home median sale prices rose by 4.42% on a year-over-year basis, while condo median sale prices rose by 10.52%. Additionally, the average single-family home sells for 112% of the original listing price, while the average condo sells for a slight discount, at just 99.7% of the original listing price.

Inventories continue to dwindle, as homeowners are reluctant to sell their properties

This rise in prices that we’ve seen has been fueled by a lack of new supply hitting the market. Each and every month, we’ve seen inventories slowly get bought up and seemingly taken off the market for good. In the month of June, we saw 7.87% fewer single-family homes on the market when compared to this time last year. When we turn to the condo market, we see 18.77% fewer listings on the market at the end of June.

San Francisco remains one of the few markets where we’re seeing listings spend less time on the market

As you might expect, given the rising prices and inventory issues that we’ve been observing throughout San Francisco, listings are being bought up incredibly quickly. The average single-family home spends just 14 days on the market, while the average condo spends 31 days on the market. These figures represent a year-over-year decrease of 6.67% in the single-family home market and no change in the condo market.

The single-family home market continues to be seller-dominated, while buyers have a bit of leverage in the condo market

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 seller’s market, whereas markets with more than three months of MSI are considered buyers’ markets.

The single-family home market in San Francisco has been dominated by sellers for quite some time, and that did not change in the month of June, with the area having just 1.5 months' worth of inventory on the market. In the condo market, buyers are slowly losing their bargaining power as inventory levels slowly dwindle away over time. However, there’s still some room to negotiate in the condo market, with 3.5 months of supply listed for sale.