San Francisco Real Estate 2024: Trends and Forecast for Buyers and Sellers
The San Francisco housing market is poised for change in 2024. The rising mortgage rates are expected to stabilize home prices after years of runaway growth. This year is shaping to be a more balanced market for San Francisco home buyers and sellers, with more selection but moderating price gains. The city remains desirable, and homes for sale in San Francisco will still be in high demand. Here is an overview of the critical factors impacting the San Francisco market and a forecast for where things are headed:
Housing supply remains low
One of the most significant ongoing issues facing San Francisco real estate is the need for more available housing inventory. Inventory has declined for years and is expected to remain low in 2024. High demand combined with limited new construction will keep supply tight. This trend favors sellers, as buyers compete for relatively few homes. However, buyers may face bidding wars and must act quickly when a desirable home hits the market.
Prices are expected to remain high but moderate
Home prices in San Francisco have reached record levels in recent years. The forecast for 2024 predicts high prices, but the rate of appreciation is expected to slow down. Prices are expected to rise around 5% annually after gains of 8-12% per year from 2012 to early 2023. The moderating price growth will provide some relief for buyers, but affordability will remain a major challenge.
Mortgage rates are projected to rise gradually
Mortgage rates will rise gradually in 2024 as the Federal Reserve continues unwinding its pandemic policies. Rates will reach around 5.5-6% for 30-year fixed-rate mortgages by late 2024. This rate is still low compared to historical averages but significantly higher than the sub-3% rates during the pandemic. The rising rates will impact buyer budgets and may price some people out of the market.
Luxury segment faces more headwinds
The luxury segment in San Francisco saw a boom during the pandemic but is facing greater headwinds now. Wealthy buyers from the tech sector had been fueling ultra-high-end sales, but stock market volatility and slowing IPOs have created uncertainty. Luxury sales activity slowed in 2022 and is expected to moderate further in 2024. However, the high end will still see activity, especially for trophy properties and unique architect-designed homes.
San Francisco real estate market
The San Francisco real estate market remains one of the most expensive in the country. Home prices continue to reach new highs due to strong demand from tech workers. However, high prices have begun pricing out some long-time residents. The market may start to cool as remote work becomes more common and workers move to more affordable areas. San Francisco remains a desirable but costly place to buy a home.
Things to do in San Francisco
San Francisco offers something for everyone. Ride the iconic cable cars up and down the city’s steep hills for stunning views. Wander through Golden Gate Park and stop to smell the flowers at the Conservatory of Flowers. Indulge in fresh seafood at the Fisherman’s Wharf before exploring the bay on a ferry boat. Take advantage of the diverse neighborhoods like Chinatown and the Castro for shopping, food, and culture. San Francisco offers a plethora of attractions and activities that are sure to captivate your heart.
