2024 Housing Market Analysis – San Francisco Bay Area, CA
Are Housing Prices Going Down In The San Francisco Bay Area?
According to Compass Data, Housing Prices are down from 15% from peak highs in 2022 when inflation rates soared as of July 2024. Prices hit recent lows in 2023 but have gone up 7% from 2023 to 2024. Please note: 3-month rolling average of monthly median sales prices for “existing” houses, per CA Association of Realtors or 3-month rolling median per NorCal MLS Alliance. Analysis may contain errors and subject to revision. All numbers approximate, and may change with late-reported sales.
Is it good time to buy home in Bay Area now?
Post-pandemic property buying opportunities are unmatched. Here’s why: 1. A big rebound in the S&P 500 and tech companies; the S&P 500 returned 31% in 2019, while tech giants like the Magnificent Apple, Microsoft, Google parent Alphabet, Amazon.com, Nvidia, Meta Platforms and Tesla had GIANT years.
Are rent prices dropping in Bay Area?
Yes, the median rent for an apartment in the Bay Area is down $350 over last year. That is a huge decrease in rental pricing.
Monthly Comparison
To break it down by month:
August 2023: $4,800
August 2024: $3,900
This is a $900 drop in the median rent from August of last year to August of this year.
General Downward Trend
The overall trend of the data is in a decline in 2024 compared to 2023. The median rent was progressively lower from January to April 2024 compared to the same months in 2023; in May and June, although there was a small increase for those two months in 2024, the median rents were still less than the peak of 2023.
Current Market Status
As of August 2024, median rent in the Bay Area is now pegged at $3,900. That’s 82% above the national median. Yet, still, it’s well below the figures for this time last year. Overall, data all points quite conclusively to rents in the Bay Area coming down: clear year-on-year falls and a general trend downwards experienced through most of this year.
What Are The Hottest Real Estate Areas in the Bay Area?
The Bay Area real estate market is buzzing in 2024, with certain areas standing out as particularly hot. Santa Clara County is leading the charge, with homes selling incredibly fast—some staying on the market for just eight days. If you’re in the market here, be ready for some serious competition.
Over in the East Bay, Alameda County is another hotspot, with a large number of homes going for above their asking prices, thanks to tight inventory and bidding wars. Buyers are flocking to the area despite rising prices.
For those looking for suburban charm, Woodlands in Walnut Creek has become a highly sought-after neighborhood. It’s seen a 40% rise in home values over the last few years, with buyers drawn to its large family homes, excellent schools, and suburban lifestyle. The area has a great mix of space and access to amenities, which is a big draw for families.
Another area seeing significant demand is Fremont and its surrounding neighborhoods like Pleasant Hill and Hayward Highlands, where prices have climbed as more people seek suburban homes with proximity to Silicon Valley.
Mid-Summer Market Conditions – San Francisco Bay Area
As of August 8th, mortgage rates had declined to their lowest point in over a year, while financial markets were experiencing very substantial volatility. Most analysts believe the Fed will finally begin to drop their benchmark rate in September (pending a positive inflation report in mid-August). Lower interest rates, of course, have considerable effect on the cost of homeownership for those financing their purchase, and a sustained decline would almost certainly spark increased market activity — not only of buyers, but potentially of sellers who held off listing their homes in the past 2 years due to the “mortgage lock-in” effect. Much depends on the scale of any decline in rates — as well as possible changes in other economic conditions — through the end of the year.
Following the typical seasonal trend, the market cooled in summer from what is usually its most heated selling season in spring. New-listing and sales activity slowed, overbidding declined, and homes took longer to go into contract. The 3-month-rolling median house sales price often dips in summer after peaking in spring (due to a number of factors) but it remains higher year-over-year — as is the median condo sales price after a July jump. The market usually sees a dramatic rebound in new listings in September to fuel the autumn selling season, but August may see an “unseasonal” burst of sales activity if the decline in interest rates continues in coming weeks.
Finding comprehensive and affordable homeowners’ insurance remains challenging: According to the CA Association of Realtors, nearly 7 percent of recent real estate transactions statewide fell out of escrow due to insurance issues, but noted that “The state’s largest insurance regulatory reform in 30 years is set to go into effect by the end of this year.” Hopefully, this will result in substantial improvement to a very difficult situation in many of our markets.
Future Outlook On Housing Market Economic Factors
Wall Street Journal
UofM Consumer Sentiment Index
Bloomberg News
“Inflation around the globe is slowing way faster than expected. If economists are right… next year [will see] inflation back to normal levels for the first time in three years.” Wall Street Journal, 12/24/23, “For Much of the World, Inflation Will Be Normal in 2024 – Finally”
“Consumer sentiment…soared 14% in December [due to] substantial improvements in how consumers view the trajectory of inflation…All age, income, education, geographic, and political identification groups saw gains in sentiment…[2024] inflation expectations plunged from 4.5% last month to 3.1% this month.” University of Michigan, Consumer Sentiment Index, December 2023
“Housing starts surged to a six-month high, sales of previously owned homes picked up from a 13-year low and builder optimism boosted by increased interest from prospective buyers. Meanwhile, Americans’ home-buying plans rose this month by the most in more than a year. The bounce back comes as mortgage rates have declined by…the biggest drop over a comparable period since 2009.” Bloomberg News, 12/20/23
“The 30-year fixed-rate mortgage remained below 7%…after 17 consecutive weeks above. Lower rates are bringing potential homebuyers who were previously waiting on the sidelines back into the market…Heading into the new year, the economy remains on firm ground with solid growth, a tight labor market, decelerating inflation, and a nascent rebound in the housing market.” Freddie Mac, 12/21/23 & 12/28/23
Since changes in economic indicators didn’t begin to affect market psychology until early-mid November, right before the mid-winter holiday slowdown, and the homebuying process takes 30 to 60 days from loan qualification and offer acceptance to closed sale, significant effects of these changes on real estate market statistics will not begin to show up until January data comes in.
Median Houses Sales Price currently site at 1.68M compared to 1.56M In 2023
Trend of Condo Prices in San Francisco and Comparative Analysis Between Downtown and Non-Downtown Markets
Overview of San Francisco Condo Price Trends:
The San Francisco condo market has undergone a great deal of price fluctuation in the last two decades. It began with the foreclosure crisis, continued through the Great Recession, and most recently, the COVID-19 pandemic, along with a rapidly increasing interest rate. Over this period, since 2005, the median condo sales price (3-month rolling) has been highly determined by other macroeconomic events.
A significant drop in median condo prices followed when the foreclosure crisis and the Great Recession set in from 2007-2008, with a gradual recovery starting in 2011. Although interest rates went up, and the market began to cool off, from 2017 through 2022, prices peaked during the pandemic due to increasing demand. Condo prices are still comparatively high but have leveled off just slightly below the peak recorded in 2022. Looking forward, the market for 2023-2024 could be set up for more stable growth as prices revert to levels seen in the early 2020s.
Downtown vs. Non-Downtown Market Comparison:
The San Francisco condo market is geographically divided between the central downtown districts and outlying non-downtown areas, consisting mainly of smaller, older buildings in less dense, more suburban locations.
- Downtown/SoMa Market: Condo prices here have been most volatile, peaking around 2019 before taking a serious nosedive. The downtown condo market saw drastic price drops by 2023, with recovery expected in 2024, influenced by the pandemic and economic shifts.
- Non-Downtown Market: Outside downtown, the condo market has performed better. Prices have generally been rising since the Great Recession and steadily recovered after the pandemic. By 2024, prices in the non-downtown condo market show stronger growth than downtown, floating around $1.3 million.
Key Takeaways:
- Condo Market in the Bay Area: The median sales price of Bay Area condos hasn’t risen as sharply as house markets, with distinct dynamics between these housing types. While the market is sensitive to short-term changes, longer-term trends indicate more reliable stability.
- Market Disparities: The price gap between downtown and non-downtown areas highlights variability. Downtown areas, influenced by large-scale construction, tech jobs, and proximity to civic and financial districts, have shown more volatility compared to the stable, steadily growing non-downtown areas. Moving into 2024, factors like interest rates and demand will continue shaping condo prices. The market may stabilize post-pandemic as interest rate shocks get absorbed.
Bay Area Median House Values by County
2024 YTD Sales: By Bedroom/Bath Count
| County | 2 Bedroom, 1-2 Bath Houses | 3 Bedroom, 2-2½ Bath Houses |
|---|---|---|
| Median Sales Price | Median Square Footage | |
| Alameda County | $855,000 | 1062 sq.ft. |
| Contra Costa | $624,500 | 1079 sq.ft. |
| Marin County | $1,350,000 | 1166 sq.ft. |
| Monterey County | $781,000 | 1022 sq.ft. |
| Napa County | $775,000 | 1104 sq.ft. |
| San Francisco | $1,325,000 | 1200 sq.ft. |
| San Mateo County | $1,315,000 | 1085 sq.ft. |
| Santa Clara County | $1,300,000 | 1036 sq.ft. |
| Santa Cruz County | $940,000 | 1080 sq.ft. |
| Solano County | $450,000 | 1254 sq.ft. |
| Sonoma County | $717,500 | 1220 sq.ft. |
Sales reported to NorCal MLS Alliance in 2024 by mid-July. Counties contain submarkets of widely varying values. Median values fluctuate for reasons besides changes in fair market value. Data from sources deemed reliable but may contain errors and are subject to revision.
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Author: Saini
My name is Saini, and I founded the We Buy Houses in San Francisco Bay Area team with years of experience in the real estate industry. I have assisted numerous sellers in selling their homes quickly, “AS-IS”, and for a fair price.
He’s been featured in multiple publications including Yahoo Finance, GoBankingRates, LegalZoom, The Mortgage Report, Apartment Therapy, US News and World Report, and SuperMoney among others.