San Francisco Market Update | December 2025

San Francisco Market Update

December 2025

Clients, friends, and colleagues:

I hope you all have been having a wonderful holiday season, and wishing you a joyous new year celebration! The market has been quite cool since November (as is typical) during these holiday months. This is marked by a substantial decline in both listing and sales activity -- not just from the fall, but new listing activity is also significantly below this time last year (about a 6% decline). The contraction typically continues before waking up in mid-January.

As illustrated in this report, by virtually every indicator - prices, inventory, overbidding, speed of sale, etc - the San Francisco market this past fall saw a stunning surge in demand, which we ascribe to the accelerating AI startup boom in the city. San Francisco now has one of the most heated markets in the country.

Our focus now shifts toward the New Year's market. In the past, the beginning of the year frequently ushers in a substantially higher level of activity that continues to build into spring. This occurred in early 2025 until affected by the "tariff shock" and subsequent economic reactions, initiating a significant slowdown in April.

In the broader financial landscape:

The Nasdaq is about even over the past month (+1%) and is +22% YTD.

The Dow is up about 2.5% over the last month and is +14% YTD.

Mortgage rates have continued a fairly steady decline throughout 2025: the average 30-yr fixed started just under 7% to begin the year and today it's hovering right around 6.2%.

If you have any questions about the market or specific property, I am always here and happy to help.

Tip: for the motivated buyer, now is a good time to ask about pocket listings and off-market inventory as many sellers are prepping for the spring market :).

Warmly,

Ron