Shrugging Off War, the SF Market Only Gets More Heated

The median HOUSE sales price in March 2026 hit $2,150,000, up 18% year-over-year, exceeding the previous peak of $2,050,000 in April 2022. The median CONDO sales price was $1,357,500, up 27% year-over year, marking the second-highest monthly price ever after the $1,375,000 peak in April 2022.

22 luxury HOUSE sales of $5 million+ were reported in March 2026, up 83% year-over- year, surpassing the previous peak of 21 sales in June 2021. 24 luxury CONDO sales of $3 million+ were reported in March, up 380% year-over-year, exceeding the previous high of 17 sales in August 2021.

The number of homes listed for sale fell 28% year over year. The inadequate supply of listings - especially of houses - compared to soaring demand continues to pressurize the market as buyers compete furiously for scarce listings.

85% of house sales sold over list price with an average sale price 23% over list price, tied with April 2022 for highest overbid percentage ever. 62% of condo sales sold over list price with an average sale price 7% over list price, the highest overbid % since 2019.

The average days on market to acceptance of offer was 29 days in March 2026, the fastest rate of sale since spring 2022. Price reductions fell 39% from March 2025.

While national home price appreciation is stuttering to a halt and many states and regions are seeing price declines, San Francisco's median home sales prices continue to surge higher, a dynamic we expect to see continue in 2026. The underlying factors are an extremely inadequate supply of homes for sale vs. rapidly increasing demand due to the Al startup boom. Very fast sales and competitive bidding wars between buyers have become the norm. Though the city's house market has been seeing the lowest supply and highest demand, its condo market is also experiencing a dramatic rebound. Rents have also been in rapid ascent with the influx of young high-tech workers eager to work in Al.

Interest rates are near multi-year lows and stock markets, though recently volatile, remain at or not too far off all-time highs. Local Al startup valuations have been skyrocketing with substantial effect on employee wealth. Though national consumer confidence remains low and employment concerns continue, they don't appear to be impacting San Francisco. As has been the case in the past 2 years, more affluent buyers seem poised to play an outsized role in demand.

We anticipate a very heated spring market, and in the Bay Area "spring" often starts in February.

In 2025, Bay Area real estate markets started the year seeing strong buyer demand, but had the wind taken out of their sails by the political/economic uncertainty that soared in early spring. Then, in mid- late summer, stock markets rebounded to hit new highs, and interest rates began a sustained decline, initiating a shift in the psychology of buyers and sellers that is still developing.

However, in San Francisco, the market has been supercharged by its Al startup boom, a dynamic that dramatically accelerated this past fall. After years of social, economic and demographic challenges, the city has shifted back from being the weakest market in the Bay Area to the strongest. Stupendous amounts of new wealth are being created, and market conditions may well exceed those last seen in the IPO boom of 2019. Demand is far outpacing the supply of homes for sale, and we expect the city's median house sales price will reach a new high in 2026. The luxury home market is particularly competitive, and in our most expensive district - which includes Pacific & Presidio Heights, Cow Hollow and Marina - median house and condo prices already hit new peaks in 2025. The condo market, though not as heated as the house market, has begun a substantial recovery fueled by high-tech workers flocking to the city.

As 2026 begins, interest rates are near multi-year lows and stock markets are at or close to all-time peaks. Early in the new year, it is common for buyers, re-energized to move forward with major life decisions, to jump back into the market faster than sellers list their homes for sale. This disparity of increasing demand versus a low supply of new listings usually runs through the spring, typically making these months the most heated selling season of the year. Last year, this was upended by the
tariff shock. Barring new, unexpected economic alarms, we expect this spring to very heated indeed.

NOTE: This report includes an image link to our comprehensive review of district and neighborhood values and market dynamics.

Generally speaking, this summer's market saw no large shifts in market dynamics beyond typical seasonal changes, and due to the Al boom, San Francisco remains one of the strongest markets in the Bay Area. The focus now is on the fall selling season, which runs from early September to early November before listing and sales activity begins to plunge for the mid- winter holidays. Early fall almost always begins with a huge surge in new listings, which then provides a substantial boost to sales activity, especially in higher-price segments. Probably the biggest wild card right now is what is going to happen to interest rates, but economic indicators present a surprisingly wide range of mixed messages.

As of the first week of September, mortgage rates, at slightly below 6.3%, are suddenly getting close to the 6% range many analysts believe is required to significantly boost buyer demand. But interest rates have been extremely volatile in recent years, with big, sudden changes in direction common - as occurred last year in late summer/early autumn. The Al boom continues to gain traction in San Francisco, and stock markets have hit new all-time highs in the past month, a big positive for affluent real estate markets like SF. The last inflation reading was unchanged at 2.7%, but the more recent Producer Price Index saw its largest monthly increase in over 3 years. Consumer confidence readings remain low; measures of economic uncertainty and political volatility - both national and international - remain high; and the latest jobs report was generally considered relatively dismal. Consensus opinion is predicting the Fed will drop its benchmark rate this month - for the first time in 2025 - but much depends on inflation reports due in coming weeks.

Besides the usual review of standard measurements of supply and demand, this report also contains detailed information regarding San Francisco's neighborhood markets.

"San Francisco has had its share of tech companies since the dot-com boom, but the money pouring into artificial intelligence has lately supercharged the city's tech profile...Last year, [SF companies] raised nearly $35 billion [in venture capital funding]...The change is visible. Rents are climbing again. City buses are filling back up. And the face of San Francisco is starting to look younger...The city is the tech industry's hub for artificial intelligence."

"What if San Francisco is the new Silicon Valley?" The New York Times, 8/4/25

Over the past couple years, the Al boom has most dramatically affected the housing markets in Silicon Valley, with their established players like Nvidia. San Francisco, though home to major Al firms like OpenAl and Anthropic, has been affected, but much more modestly - but that is now rapidly changing. The Al industry is exploding in the city, with dozens of new startups making San Francisco their home, and the city has become a powerful magnet for those eager to participate in perhaps the biggest technological/economic revolution of our times. Just as in the dotcom and recent high-tech booms, they are doing so due to the network effect, i.e. the tremendously dynamic synergies of being within a half mile - or even a hundred yards - of each other. That is a huge plus for the best and the brightest flocking to Al, for companies growing fast, and for the intense cross-fertilization of ideas characterizing the industry.

This has shifted the SF housing market into one of the strongest in the Bay Area, diverging from the cooling trends seen in most other counties and the country at large. Unlike most other markets, the supply of listings is dropping, price reductions are declining, and home prices are starting to climb year-over-year. And these are very early days for the Al boom in the city: If trends continue on course, hiring accelerates, startups grow, and privately held companies eventually move toward IPOs, the explosion of new wealth will likely be astounding.

Across most of the Bay Area, the severe economic volatility which prevailed in Q2 - and the absence of a meaningful decline in mortgage interest rates - generally caused a significant year-over-year weakening in the spring selling season, usually the most dynamic of the year.

However, this did not occur in San Francisco, whose indicators of supply and demand - illustrated in this report - either strengthened or remained essentially unchanged from Q2 2024. The median sales prices for both houses and condos hit their highest quarterly points since the peak of the pandemic boom, and apartment rents were the highest since 2020. Though one has to assume the market would have been even stronger if the macroeconomic conditions had been more favorable, the SF market remained quite robust.

Furthermore, as of early July, measures of economic uncertainty were dropping, stock markets had staged an astounding recovery to hit new highs, consumer confidence had begun to rebound, and interest rates were gradually declining. Improvements in these conditions, should they continue, may support an even more heated market in the second half of the year.

As always, correct pricing, preparation and marketing are imperatives for sellers desiring the best results. And opportunities exist for buyers who keep a close eye on both new and older listings, monitor time-on-market and price reductions on unsold homes that meet their requirements - or perhaps need a little bit of work - and are prepared to move quickly and
aggressively.

Ongoing volatility in political/economic conditions - particularly the plunge in stock markets in April, which affected May home sales - took some of the wind out of the spring real estate market, usually the most dynamic of the year. Uncertainty regarding the economy and the possible implications for personal financial circumstances understandably made a proportion of buyers and sellers hesitant about moving forward. Still, while most Bay Area markets slowed year over year, there was nothing approximating a crash. As inventory continued to rise, sales activity failed to keep pace, resulting in lower absorption rates (a comparison of demand vs. supply). With more homes for sale and somewhat less competition between buyers, overbidding generally declined, time-on-market ticked up, and price reductions increased. Most counties saw small year-over-year declines in their 3-month-rolling median home sales prices.

But many of these indicators of slowdown did not occur in San Francisco, which had one of the Bay Area's strongest markets in May: SF median sales prices rose, inventory remained steady, and both the number of listings going into contract and the % of sales sold for over asking price increased.

It's worth noting that virtually all May sales were negotiated before the May 12 reversal of China- tariff policies, which triggered an enormous rebound in the stock market. Unlike stocks, home sales don't reflect shifts in market conditions instantly - there is typically a 3-to-6-week lag between offer acceptance and close of sale - and there are indications that the effects of April's negative economic gyrations on buyer and seller psychology in the Bay Area may already be fading.

The speed and scale of developments in 2025 - tariffs, stock markets, inflation, interest rates, consumer confidence, tax law, national debt concerns, international relations, what the Fed decides, and so on - have made it challenging for real estate market reports to keep up. As always, real estate trends vary locally. The rest of this report focuses on the specifics of the San Francisco market.

Economic Volatility Injects Uncertainty into Spring Market,
But San Francisco's House Market Remains Surprisingly Strong

While most of the Bay Area saw significant shifts to more uncertain and uneven markets in April, the SF house market remained characterized by robust demand, though its condo market remained much softer. However, there were indications of increased hesitancy among some buyers as they tried to come to terms with new economic uncertainties both personal and macroeconomic.

Year over year, the supply of homes for sale rose about 9%, a far smaller increase than in other local markets, some of which saw jumps of 70% or more. The number of listings going into contract in April ticked up slightly, though the number of closed sales fell. The quantity of price reductions, which soared in most Bay Area Counties, remained flat from last year. The 3-month-rolling SF median house sales price was unchanged from April 2024, while the median condo sales price declined.

The homes seeing highest demand, and most likely to sell quickly with multiple offers, are houses in absolute move-in condition, often professionally staged, aggressively priced, and in prime locations.

As of early May, the Fed kept its benchmark rate unchanged, mortgage rates continued to hover near 7%, but stock markets substantially recovered from early-April plunges. Consumer confidence saw precipitous declines last month amid the enormous political/economic volatility. Specific San Francisco market data follows in this report but note that April sales statistics reflect many transactions that went into contract before the severe financial market conditions which began early in the month. May sales data may better reflect April market conditions.