January 2025 Market Report

San Francisco Real Estate

Clients, friends, and colleagues:

The recent fires in Southern California have been heartbreaking, and our thoughts are with all those who have experienced loss or disruption. These events are a powerful reminder of how quickly life can change and the importance of being prepared. Whether or not you or someone you know has been directly affected, I hope you and your loved ones are staying safe and supported during this challenging time. It’s also a sobering reminder of how important it is to ensure your property is fully protected.

If you hold title to your property in a trust or LLC, please take a moment to check your insurance policy.  A carrier can potentially deny a claim if the home is titled in a trust or LLC, but the insurance policy is under the individual homeowner's name. This is because the ownership structure as indicated on the title must match the named insured on the policy to ensure proper coverage. To avoid a dispute, it's crucial to add the trust or LLC as an additional insured on the policy. If you have questions or need guidance, I’m happy to connect you with a trusted insurance advisor.

As we enter the market here in 2025, here are a few quick and key data points:

Our downtown sector has seen some recent eye-popping sales that show the neighborhood is poised for a strong rebound:

• The grand penthouse at Millenium tower (301 Mission) closed 4 days ago for $9,000,000

• The penthouse at The Avery (488 Folsom) sold for $11,250,000 the day before New Year's

• A mid-level 3-bedroom @ One Steuart sold for a record $3,110/sqft (Sale price: $9,250,000)

• Talks are underway for the single biggest office transaction in San Francisco post pandemic. Flynn Properties has emerged as the buyer to purchase the $416M+ loan for Chevron's HQ at 555-575 Market St.

• However, in less positive news, Bloomingdale’s announced today that it will be closing its flagship store at the Westfield San Francisco Centre, reflecting broader shifts in the retail market.

More broadly, the median house and condo sale prices increased year over year in San Francisco, though still running well below '21-'22 pandemic highs. Fueled primarily by rising stock markets, luxury home sales outperformed the general market. Overbidding of asking price increased, and, on average, listings sold a few days faster than in 2023. Detailed statistics to follow in the graphs/charts below.

Macroeconomically: 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.

Despite 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 2023, and seems poised to improve further.

As we know, real estate markets are fiercely seasonal. December was the slowest month for both new listings and signed contracts as usual. Activity quickly rebounds and accelerates into Spring, which typically sees the year's most heated market conditions.

If you have any questions about the market, the buying/selling process, or specific property, feel free to reach out!

Cheers,

Matt

Matt Wathen

DRE# 01879082

M: 415.920.3213

[email protected]

Statistics are generalities, essentially summaries of widely disparate data generated by dozens, hundreds or thousands of unique, individual sales occurring within different time periods. They are best seen not as precise measurements, but as broad, comparative indicators, with reasonable margins of error. Anomalous fluctuations in statistics are not uncommon, especially in smaller, expensive market segments. Last period data should be considered estimates that may change with late-reported data. Different analytics programs sometimes define statistics - such as "active listings," "days on market," and "months supply of inventory" - differently: what is most meaningful are not specific calculations but the trends they illustrate. Most listing and sales data derives from the local or regional multi-listing service (MLS) of the area specified in the analysis, but not all listings or sales are reported to MLS and these won't be reflected in the data. "Homes" signifies real-property, single-household housing units: houses, condos, co-ops, townhouses, duets and TICs (but not mobile homes), as applicable to each market. City/town names refer specifically to the named cities and towns, or their MLS areas, unless otherwise delineated. Multi­county metro areas will be specified as such. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers to be considered approximate.

Many aspects of value cannot be adequately reflected in median and average statistics: curb appeal, age, condition, amenities, views, lot size, quality of outdoor space, "bonus" rooms, additional parking, quality of location within the neighborhood, and so on. How any of these statistics apply to any particular home is unknown without a specific comparative market analysis.