I am pleased to share with you our latest Market Report for the San Francisco Bay Area. The report begins with economic and real estate commentary presented in partnership with the Rosen Consulting Group (RCG). For the statistical report of the regional housing market, we look at the ten counties associated with the SF Bay Area, focusing primarily on detached single-family homes, with added coverage of the significant condominium market in San Francisco. Enjoy the information and insight provided in the report and I look forward to discussing the market with you.
ECONOMY CONTINUES TO EXPAND
The SF Bay Area housing market stabilized in August, as home sales increased modestly. While economic headwinds may persist, the resilient regional economy continued to expand. The unemployment rate remained in the mid-3% range and more than 100,000 jobs were added through the summer. As more companies increase the amount of time employees spend in the office, demand for homes in the inner SF Bay Area should continue to increase.
AN INCREASE IN SALES
The number of homes purchased increased slightly in August, reaching roughly 3,400 homes sold across the SF Bay Area, an increase of 3% from July. The tight inventory and rising mortgage rates constrained buying activity in August even as the number of cash sales increased. Sales at the upper-end of the pricing spectrum increased at the fastest pace, with sales in the $3.5 million to $5 million range increasing by 14% while sales greater than $5 million increased by more than 50%. In August, sales of homes priced less than $1 million increased by roughly 4%. The middle of the pricing tier was the weakest, with sales in the $2 million to $3 million range contracting by 10%.
By county, sales trends varied somewhat, though nearly all improved from the pace of sales in July. The strongest monthly sales gains were produced in Alameda, San Mateo and Santa Clara counties, with the latter two counties increasing by double-digit percentages. While sales fell in San Francisco and Solano counties, the percentage drop was lower in August than in July, pointing to a stabilization of sales activity. Sales in Marin County declined the most, with roughly 27% fewer homes sold in August than the preceding month.
INVENTORY INCHES UPWARD
The number of homes for sale increased in August to more than 5,000 homes for the first time since late 2022. Despite the increase, listings remain 25% lower than one year ago, highlighting the continuation of tight market conditions for potential buyers. The limited options available to potential buyers remains one of the primary constraints on home sales. Larger increases in listings were observed in Marin, San Francisco and Solano counties, pointing to a potential improvement in sales in the coming months. The largest decreases in listings were generated by Contra Costa and Santa Clara counties, where the number of for-sale homes fell by 5%.
The combination of high mortgage rates, limited inventory and some buyer hesitation constrained sales activity through much of the summer, yet the SF Bay Area housing market is poised to rebound heading into the final months of the year. With pricing stabilized, more potential buyers may return to the market from the sidelines as households acclimate to the current mortgage rate environment. Should the buyer pool deepen, competition for homes in prime neighborhoods will accelerate.