Clients, friends, and colleagues:
We all know the market here in San Francisco is hyper competitive. Yes, it's always segment and property-specific, but demand is outweighing supply by a large margin, and we are really starting to see it spill over even into our downtown (South Beach) condo market. This is my biggest change since my May update; our high-rises in South Beach are seeing quicker sales and more demand. Rents are spiking and buyers are feeling more urgency.
Here's some quick, bite-sized data points:
(1) The average 30-YR fixed remained at 6.49% for the 6th consecutive week per Freddie Mac. If tensions with Iran continue to cool, expect mortgage rates to drop. If rates drop, expect demand to get even fiercer. But inflation makes a drop in interest rates less likely.
(2) The median price for a single-family home in San Francisco is $2,150,000 as of the end of May, a 21% jump year-over-year.
(3) The median price for a condo in San Francisco is $1,350,000 as of the end of May, a 12.5% jump year-over-year.
(4) Median days on market is 13, down from 17 year-over-year.
My buyer successes have come from being bold with your offers: scrutinize the data but also understand the momentum of the market, and keeping an eye-out for off-market opportunities. Here in the summer swing, you can find sellers who are willing to sell now vs. prepping for the Fall market.
For a more macro perspective from our chief Economist:
The Bay Area housing market hit a lot of national headlines in May. In San Francisco, AI and tech-driven demand has created aggressive bidding wars on the scarce inventory. Skyrocketing rents are back in the norm. Even the city’s condo market, which has been under pressure for six years, is showing signs of demand recovery.
For the first time in many years job creation in the Bay Area is positive and economic opportunity is attracting net inbound migration, despite the region’s chronic shortage of homes and affordability issues. It’s notable that other tech cities like Seattle and Austin are not seeing the boom in the real estate market related to AI. In fact, those cities are now sending more people to San Francisco than the reverse.
While the city dominates the headlines, many areas have not seen the massive wealth effect driving home buying demand like the city has. In this cycle, this resurgent demand is so far concentrated to a very small section in the city, and luxury markets in Peninsula and Marin.
For much of the region, interest rates matter more than stock market performance. In May, mortgage rates jumped higher with sharply higher inflation data. That tension between higher interest rates and the wealth effect is likely to continue for the rest of 2026. Inflation pressures have been pushing higher, and it seems unlikely that interest rates will dip again very soon.
If you have any questions about a specific property, I'm always here to help!
Warm regards,
Ron
Recent sales & review @ the bottom of this email.
