Home to the coveted Silicon Valley and the iconic Golden Gate Bridge, San Francisco is one of California’s most competitive real estate markets. The recent drop in median home sale prices has made the Bay Area even more attractive to buyers who want a piece of this historic and innovative town. If you are leaning toward a San Francisco real estate investment, here are a few facts about the current market conditions.
Key Market Trends in 2023
Mortgage interest rates and median sale prices in San Francisco are trending downwards. The median home price in San Francisco in 2023 Q4 was $1.35 million. According to San Francisco CA real estate professionals, this was a 10.9 percent drop from 2022, where the median price was $1.4 million. Compared annually, the 2023 drop is a 13-percent market shift.
Interest rates are also dropping. Between November and December 2023, the weekly, 30-year mortgage numbers went from 7.79 percent to 6.61 percent. These drops are attributed to the falling inflation, which is expected to continue lowering rates and prices in 2024.
Competitiveness and Market Health
Financial uncertainty, high mortgage rates, a low inventory in many neighborhoods, and negative media coverage of a failing market marked the 2023 San Francisco real estate market. But with interest rates and median prices falling, the market is rebounding and trending upwards. Much of this growth is also thanks to a rebound in consumer confidence, improved economic conditions, the expansion of AI companies downtown, and more positive media coverage.
Resident and Property Profile
Even when median prices in San Francisco dip, they remain well over $1 million and over $1 million over the national average. These numbers make the San Francisco real estate market one of the priciest in the country, a fact attributed to the 111.65 percent growth the real estate has experienced in the last decade. From the numbers, however, homes in the Bay Area increase their value by 7.79 percent every year, making buying a house here a great investment. 76 percent of buyers in the area in 2023 even expressed interest in remaining within the city.
Factors Affecting Housing Prices
Like any other market, several social, government, and economic factors shape the real estate landscape in San Francisco. Before purchasing a property here, you need to consider factors like government policies and tax credits, the economy, and mortgage and interest rates. For a better snapshot of how these elements play into your investment decision, consult a San Francisco real estate expert.
Learn More About Investing in San Francisco with Victoria Stewart
Investing in real estate in the Bay Area involves more than learning how to buy a home in San Francisco. You also need to assess the market conditions and find homes for sale in San Francisco that meet your criteria for a home or investment property. San Francisco is also home to some of the priciest real estate in the country, so mistakes here can be costly. If you are ready to get started, contact Victoria Stewart of Nob Hill Compass today. Victoria has an intimate knowledge of the local market and years of experience helping buyers like you find their dream properties.
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