So, How Did The 2024 San Francisco Real Estate Market Wrap Up?
Pretty interesting story here! The market actually did better than some might think – we saw the median price go up by 4% overall. But here’s the really cool part: the luxury market went absolutely bonkers in the fall. We’re talking the kind of numbers we hadn’t seen since the crazy peak of spring 2022!
Why? Well, the stock market had a big year, and guess what happens when people make good money in stocks? They go house shopping. This trend is still going strong – we’ve already closed two luxury deals in the first week of 2025.
First, I want to tell you it took about 2 hours for me to go through the newsletter. Our strategist Partrick Carlise outdid himself with all the data he put together. I recommend checking it out.
There are some interesting dynamics at play:
For the luxury buyers: Not everything is on sale but there are deals here there if you know where to look. We just got a home for our client for quite a bit under its original $7.5M asking price, and another that was listed around $5M is going for about $600-700K less.
For first-time buyers: It’s a bit of a different story. Most folks trying to buy their first home aren’t sitting on a pile of stock market gains, and those interest rates aren’t making it any easier. Even though we saw some rate cuts toward the end of 2024, mortgage rates actually ended up higher than they started.
The big headache right now? Inventory – or should I say, lack of it. It’s pretty wild, people used to move every 5-7 years, but now they’re staying put for 12-15 years. Why? Higher interest rates are making people think twice about selling, and more folks are choosing to age in place.
Despite the challenges, there’s actually a lot of optimism for 2025. The luxury market is expected to stay hot, and we are getting ready to roll out lots of new listings in the coming weeks.
The bottom line? If you’ve got some money in the stock market, we suggest it might be smart to consider putting it into real estate. Something solid you can actually live in or rent out 🙂
Not a bad way to kick off 2025. Sure, we’ve got some challenges, but also plenty of opportunities. I hope we get to see each other this year. Reach out if you have any questions. I’d love to help make sure your next purchase or sale is stress-free.
In 2024, the median house sales price increased year over year. The numbers of new listings and sales rose from 2023, but volumes remained well below long-term norms. Fueled by rising stock markets, luxury home sales strongly outperformed the general market. There was a slight reduction in overbidding statistics, and, on average, listings took somewhat longer to sell. Details follow within this report.
Macroeconomically, there were quite a few ups and downs in 2024. The inflation rate dropped from 3.1% to 2.7%, a welcome decline, but not as large and consistent as hoped. In September, the Fed reduced its benchmark rate for the first time in 4 years, followed by 2 more cuts in November and December, but, confounding expectations, interest rates rose, ending the year higher than when it began. The Fed also released a tentative forecast of only 2 small rate reductions in 2025, but the Fed often alters its future “guidance” depending on economic developments. Despite significant volatility, stock markets saw very substantial appreciation in 2024, boosting household wealth, especially for the more affluent. Consumer confidence rose in the second half of the year to end 6% higher than a year earlier and seems poised to improve further.
Real estate markets are fiercely seasonal, and as usual, December was the slowest month for both new listings and listings going into contract. Activity typically rebounds early in the year and then accelerates rapidly into spring, which customarily sees the year’s most heated market conditions. In the Bay Area, if the weather cooperates, the “spring” market often begins well before the official start of the season, but much depends on political/economic factors that are challenging to predict.
There seems to be something about starting a new year that renews optimism for the future and motivates people to move forward with life plans that often include real estate.
