The San Francisco housing market has bounced back after its post-pandemic stumble, reporting a bigger jump in pending home sales than any other major U.S. metropolitan area last month, according to Redfin.
Sales in the City By the Bay increased 17.1 percent year-over-year in September and homes were selling nearly twice as fast than the typical U.S. home, going under contract after roughly 21 days—a low number indicating a competitive market for buyers and sellers.
It is a major shift from the years that followed the end of the pandemic home-buying frenzy, when the San Francisco housing market experienced a slump in prices and demand as many residents moved out of the city to seek cheaper properties in more affordable, smaller towns and downtown stores shut down due to rising crime.
Bucking the National Trend
At the national level, pending home sales rose by less than 1 percent last month compared to a year earlier, reflecting an ongoing slowdown of the U.S. housing market due to longstanding affordability issues keeping buyers to the sidelines.
But in San Francisco, pending home sales were at their highest level for that same month since 2021 and were selling at their quickest September pace since the same year. Homes sold faster in only one other metro, also in the Bay Area—San Jose. Here, the typical home that went under contract last month did so in 19 days.
There were only three metros in the U.S. where homes sold faster, year-over-year, last month, and they were all in California. The third was Oakland, where the typical home went under contract last month in 28 days.
Nationwide, the typical home that went under contract sat on the market for 50 days.
Why Is the Bay Area’s Housing Market Heating Up?
While the Bay Area remains the most expensive housing market in the country, with median sale prices of around $1.5 million in both San Francisco and San Jose, prices are still down from their pandemic peaks, making them somewhat more affordable. That is especially true for affluent workers in the city who have seen prices stagnate over the past three years, giving them an edge in the market.
“San Francisco is seeing a home-buying boom among young tech workers who just got big signing bonuses with AI companies or other tech companies and are thinking about starting families,” Redfin Premier real estate agent Ali Mafi said in the report.
“A lot of people have more confidence in buying homes because they’re making more money, which means they’re spending less of their paycheck on housing costs.”
While home prices rose 1.7 percent at the national level in September compared to a year earlier, they fell by 1.3 percent in Oakland—the fourth biggest decline of all metros analyzed by Redfin—and 0.7 percent in San Francisco. In San Jose, however, they rose by a staggering 6.9 percent.
Return-to-office orders in the Bay Area are also helping boost demand, with many buyers unable to wait for a better time to buy. According to data by location intelligence platform Placer, San Francisco office visits rose 19 percent year-over-year in September. The AI boom, which has its heart in Silicon Valley, is also likely playing a role in boosting demand from willing buyers in this area.
