If you prefer to bypass The Big Story and jump straight to the Local Market Report, click here.
The Big Story
Quick Take:
- Affordability remains a concern across the country despite lower interest rates compared to this time last year.
- New homes are being added to the market, with the US seeing a 4.21% year-over-year increase in the number of new listings in February.
- Inventory is getting back to healthier levels as we see backlogs begin to build across the country.
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.
Affordability continues to be an issue nationwide
One of the headline issues in the real estate industry over the past few years has been, of course, the affordability (or rather the unaffordability) of homes. Unfortunately for new buyers, and more specifically first time home-buyers, this issue looks like it will persist throughout 2025. Mortgage rates remain comparatively high, and home prices largely have not given back their pandemic-era gains.
This has, of course, made the dreams of homeownership difficult to achieve for countless people around the country. With the median monthly principal and interest payment exceeding $2,100 per month on a nationwide level, people are struggling to afford the purchase of a new home!
New homes are starting to hit the market again
Fortunately for the market, there are plenty of new homes hitting the market though. While there are countless people sitting on the sidelines, waiting for lower interest rates to sell their current home and buy a new one, some of these holdouts are giving up and listing their homes. The writing seems to be on the wall, meaning more and more people are giving up on the thought that we will see lower interest rates in the short term, causing them to list their homes.
This has resulted in a pleasant jump in new home listings, despite us being at the tail end of the slow season. In the month of february, we saw more than 353,000 homes hit the market nationwide. This represents a 4.21% increase on a year-over-year basis, and an 8.15% increase on a month-over-month basis!
Inventories are beginning to build, offering more options for buyers
Since we are seeing new inventory hit the market and a steady level of demand, this is causing inventories to build, which is a great sign for those looking to enter the market! In the month of January, there were 1,180,000 homes listed on the market, representing a 16.83% increase on a year-over-year basis and a 3.51% increase on a month-over-month basis. At the same time, we’re seeing demand stagnate a bit, with 4,080,000 homes sold in January, representing a 2% increase when compared to last year and a 4.9% decrease when compared to last month!
Although a top-tier property will likely end up in a bidding war, no matter if it’s in Kansas City or Calabasas, this increase in inventory could mean that there are some deals to be had on listings that sit on the market for a few weeks.
While there are areas that deviate from the national trends, this is generally what's happening nationwide. Below, you'll find a local lowdown that provides you with the in-depth coverage of your area that you need. We will continue to monitor the housing market and overall economy to help guide you in buying or selling your home.
Big Story Data
The Local Lowdown
San Francisco Real Estate Market Update – March 2025 | Kinoko Real Estate
Quick Market Snapshot:
- Inventory: A continuous decline in available homes in San Francisco, with significant year-over-year drops.
- Median Sale Prices: Prices fluctuate around the 2-year average as supply and demand find balance.
- Single-family Homes: These properties remain highly sought after, while condos are lingering on the market longer.
For in-depth market trends and data visuals, scroll down to the end of this report.
San Francisco Real Estate Inventory Continues to Shrink
The San Francisco housing market is facing a significant challenge—inventory is dwindling, especially in the single-family home sector. Over the past year, San Francisco has experienced a sharp contrast to other Bay Area submarkets, where inventory levels are seeing modest recoveries. While many other regions are benefiting from new listings, sellers in San Francisco are holding tight to their properties, which has led to a 15.87% decrease in active single-family home listings compared to last year. Similarly, condo listings have also decreased by 7.70% year-over-year.
This ongoing shortage in available properties is driving competition, with San Francisco homes becoming even harder to find. This presents both challenges and opportunities, particularly for homebuyers and investors looking for properties in the city. Learn more about how inventory impacts San Francisco's real estate trends here.
Single-Family Homes Command Premium Prices in San Francisco
Thanks to a lack of available properties, single-family homes in San Francisco are seeing higher-than-expected sale prices, with many selling well above their asking price. In February, single-family homes sold for an average of 113.3% of the original asking price, marking the highest percentage since May 2022. This trend is a direct result of limited supply, pushing home prices up, which can make it more challenging for first-time homebuyers to enter the market.
However, the condo market tells a different story. Unlike single-family homes, condos are selling closer to their listing prices, often hovering slightly below or matching the initial asking price. This creates more favorable conditions for condo buyers, but it's still essential to stay informed on pricing trends.
For more information on San Francisco's single-family home market, visit our homebuyer's guide.
Balancing Supply and Demand in San Francisco
On a positive note for buyers in San Francisco, supply and demand have remained relatively balanced in recent months. This is a welcome development, given the fluctuations seen in other markets. For meaningful change in inventory, however, the number of new listings must consistently outpace the number of sold listings for an extended period.
As a result, the San Francisco real estate market continues to be dynamic, with a fine balance between what sellers are holding onto and what buyers are eager to secure. Keep an eye on this delicate balance by checking out our latest market updates.
Sellers Rule the Single-Family Home Market; Buyers Find Leverage in Condos
In terms of market dynamics, the concept of Months of Supply Inventory (MSI) remains a key indicator of whether it's a buyer’s or seller’s market. Historically, California markets have hovered around three months of MSI, which is considered a balanced market. Anything under three months signals a seller's market, while anything over three months points to a buyer’s market.
For San Francisco real estate, the situation is a bit split:
The single-family home market is currently a seller’s market, with just 1.2 months of supply. This means sellers have the upper hand, driving up prices and reducing negotiation room for buyers.
In contrast, the condo market has a more balanced or slightly buyer-favorable outlook, with about 3.4 months of supply. Here, buyers may find a little more wiggle room to negotiate prices and secure deals.
If you’re navigating these markets, knowing which type of property you're interested in will help you strategize effectively. For expert guidance on buying or selling homes in San Francisco, reach out to our team at Kinoko Real Estate.
Final Thoughts
The San Francisco real estate market remains competitive, with inventory challenges continuing to shape trends, particularly in the single-family home sector. Buyers and sellers must stay informed and adaptable, with those in search of homes expected to face competition due to low supply. Whether you're considering purchasing a single-family home or a condo, it's essential to partner with an experienced San Francisco real estate agent who can help you navigate these trends.
Ready to start your home search in San Francisco? Explore our property listings or contact us today to discuss your options in this evolving market.
