A Tale of Two Housing Markets

One of the most interesting stories in real estate this year is that there really isn't one housing market.

Across much of the country, inventory has been steadily climbing. More homes are sitting on the market, price reductions have become commonplace, and sellers are pulling their listings at the highest rate since the pandemic.

San Francisco, however, is operating in an entirely different market.

Today, there are just 140 single-family homes for sale in the entire city, nearly 60% fewer than a year ago. Condo inventory has also fallen dramatically, down more than 44%. With 355 units available, buyers have remarkably little to choose from.

The result? Competition remains fierce.

Nearly 85% of single-family homes sold above their asking price during the second quarter, and more than 140 homes sold for at least $1 million over asking during the first half of the year. Those numbers make headlines, but they also reflect something uniquely San Francisco: list prices are often part of the marketing strategy. A home's true value is still determined by what informed buyers are willing to pay.

So why is San Francisco bucking the national trend?

It's really the result of two powerful forces colliding.

The first is supply. Many homeowners are holding onto historically low mortgage rates, leaving notably few homes available for sale.

The second is demand. While much of the country is experiencing a more balanced housing market, the Bay Area continues to create extraordinary wealth through AI and technology. Thousands of newly affluent buyers are entering the market with significant purchasing power, competing for an exceptionally limited number of homes.

When limited supply meets growing demand, the outcome is exactly what we're seeing today: multiple offers, strong prices, and one of the most competitive housing markets in the country.

Looking ahead, we don't expect the second half of 2026 to look dramatically different. Until inventory begins to grow in a meaningful way, well-prepared, well-located homes should continue to attract strong buyer interest.

The contrast between the national market and San Francisco is a good reminder that real estate has always been local. National headlines provide valuable perspective, but they rarely tell the full story of what's happening here at home.

We'll continue sharing what we are seeing in our market and, more importantly, what it means as the year unfolds.

The National Data

Share of Homes Delisted by Metro Area

One national statistic really caught our attention this month: nearly 6% of all U.S. home listings were taken off the market in April - the highest rate since the onset of the pandemic. More and more sellers are deciding that if they can't get the price they want, they'd rather wait. It's another sign that many housing markets across the country have shifted in favor of buyers. (Redfin, Keeping Current Matters)

Average Active Inventory Nationwide

For four straight years, housing inventory has been rising across much of the country. As more homeowners put their homes on the market and buyer demand has slowed, sellers are finding themselves competing with one another instead of buyers competing for homes. Rather than lower their asking price, many are choosing to pull their homes off the market altogether and wait for better conditions. (Redfin, Keeping Current Matters)

Seller Expectations vs. Market Reality

Nationally, four out of five homeowners believe they'll receive their asking price (or more) but the reality is quite different. Nearly two-thirds of homes across the country are now selling below list price, the highest percentage in years. That's the national story. San Francisco, however, continues to play by a very different set of rules. (Redfin, ResiClub)

Mortgage Rates Hold Steady above 6%

As of July 16, the average 30-year fixed mortgage rate sits at 6.55%. That's slightly lower than a year ago (6.72%), but modestly higher than where we started the year (6.09%). The bigger story, however, is consistency. Mortgage rates have remained above 6% since 2022, reinforcing what many buyers and sellers have come to accept: today's market is being driven less by hopes for dramatically lower rates and more by life events, limited inventory, and local market conditions. (Federal Reserve Bank of St. Louis)

Mortgage Rate Predictions

While mortgage rates remain elevated by historical standards, they've been moving in the right direction. Lower borrowing costs, combined with continued job growth and rising wealth in the Bay Area, are helping fuel buyer demand despite limited inventory. The chart below tracks expectations through Q4 2026. (Freddie Mac, Fannie Mae, MBA, Wells Fargo)

What's Happening in San Francisco

Inventory at Record Lows

One of the clearest indicators of the strength of San Francisco's market is months' supply of inventory (MSI), which measures how long it would take to sell all of the homes currently on the market if no new listings came on. A balanced market typically has 5 to 6 months of inventory. Less than 3 months generally favors sellers, while more than 6 months shifts the advantage to buyers.

In June, San Francisco's single-family home market fell to just 0.73 months of inventory, the lowest level we've seen since December 2021 (1.2 months) and one of the tightest supply conditions in recent history. The condo market, while offering buyers slightly more selection, is also firmly in seller's market territory, with inventory dropping to just 1.81 months, its lowest point since December 2021 (2.15 months). These historically low inventory levels help explain why well-priced homes continue to attract multiple offers and why San Francisco continues to outperform many housing markets across the country. (InfoSparks)

Single-Family Homes

Condos

Single-Family Homes Are HOT HOT HOT

San Francisco single-family home prices continue to break records. The median sales price reached an all-time high of $2.15 million in June, surpassing the previous record of $2,017,500 set in May 2022. That's also a remarkable jump from $1.75 million just one year ago, underscoring the extraordinary demand for detached homes amid historically low inventory. (InfoSparks)

Condo Sales Are on Fire, Too

The condo market continues its impressive comeback. June's median sales price came in at $1.30 million, just below May's record-setting $1.35 million, but well above the $1.225 million median from one year ago. With inventory tightening and buyer demand strengthening, San Francisco condominiums continue to close the gap with the city's red-hot single-family home market. (InfoSparks)

Buyers Aren’t Waiting Around

The pace of the San Francisco market remains impressive. Single-family homes averaged just 12 days on market in June, while condos averaged 23 days – a significant improvement from the much longer marketing times seen earlier this year. Buyers are making decisions more quickly as inventory continues to tighten. (InfoSparks)

A Tale of Two Housing Markets