In this video, Austin Klar—formerly a lawyer and now a San Francisco real‑estate agent—explains why the city’s housing market is diverging sharply from national trends and why 2026 is poised to be a highly competitive, seller‑friendly environment. He first outlines national data for 2025, showing a 13.5% rise in listings, a neutral market with 4.2‑month supply, modest price‑cut activity (≈39% of homes) and a 1% drop in sales. He then contrasts this with San Francisco, where new listings were essentially flat, sales rose over 5% (single‑family) and 11% (condos), monthly supply plunged to under 1 month for houses and 2.3 months for condos, and price‑cut rates fell dramatically (15% for houses, 25% for condos). Consequently, average and median prices per square foot rose 3.5%‑4.7% city‑wide, with especially steep gains in District 7 (Marina, Pacific Heights, etc.) where single‑family prices per foot jumped 13.6% and median sales rose 23.6%. Klar attributes the surge to returning office workers, new AI‑related jobs, improving public safety, and a revitalizing retail scene, all occurring while mortgage rates hover around 6% and may dip toward the high‑5% range if the Fed eases. He advises prospective buyers to prepare for rapid offer cycles and sellers to capitalize on the strong market, while offering his personal expertise for neighborhood‑specific guidance. The video ends with a call to subscribe and links to a deeper dive on San Francisco’s “impossible comeback.”
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If you're using national headlines to understand what's going on in San Francisco's housing market right now, you're in for a rude awakening. Just like during the pandemic, San Francisco's housing market is defying national trends again, except this time, while the rest of the market is decelerating, San Francisco's market is on the cusp of rapid growth. Inventory is falling, fewer homes are cutting their list price, more homes are selling, and they are selling for more money. This is Austin Klar, your lawyer turned real estate agent in San Francisco. And if the trends that we saw over the past 6 months continue into the new year, San Francisco's housing market is going to be brutally competitive.— in 2026. In this video, I'm breaking down what's happening at the national level, what happened in the back half of 2025 in San Francisco, and what all this data means for you if you're thinking of buying or selling a home in San Francisco in 2026. So let's kick it off with some context about what's going on at the national level. At the peak of inventory growth in 2025, there were over 30% more homes for sale at the national level than there were in 2024. And by the end of the year, about 750,000 homes were listed for sale compared to about 667,000 the same time the year prior. So about a 13. 5% increase. Said differently, at the national level, there were fewer people purchasing homes in relation to the number of homes available. So inventory was increasing. Another way to put this into perspective is using monthly supply, basically how long it would take to sell out of all existing inventory if no new homes were coming to market based on the pace of sales. Anything in the 4-month range is considered a neutral market. Anything below that, meaning a faster pace of sales, is considered a seller's market. And anything above that, a buyer's market. So when the number rises, it means the market is overall slower than the comparison period. And that's what's happening nationwide. Monthly supply at the end of November of 2025 was about 4.2 months, and that's up from 3.8 months in November of 2024. That number means a relatively neutral, balanced housing market, not very buyer-friendly, not very seller-friendly. That's a big change compared to prior years, especially during the pandemic when sellers had all the leverage. Two other signs of deceleration at the national level, the percentage of available homes cutting their ask price, lowering their list price, and the number of homes actually selling. About 39.1% of available homes compared to 37% last year lowered their ask price, so they sold after a price reduction. And the overall number of homes that sold fell 1% as of November of 2025 compared to the year prior. Because these data points reflect a relatively neutral market, we didn't see major price fluctuations into the negative or into the positive. Overall, it was a relatively balanced, neutral market. But that's not what's happening in San Francisco. So if you are using national metrics to predictions or choices for yourself about San Francisco's housing market or about entering or exiting San Francisco's housing market, you're doing yourself a disservice. I'm gonna delve into how San Francisco is defying those national trends in a minute. But first, you can do me a huge favor if you like videos about San Francisco real estate, lifestyle, history, current events, or new developments. I make videos about that stuff every single week, so please subscribe to my channel. And if you're thinking about buying or selling a place in the city and have questions about how all the changes we're seeing citywide are impacting our local real estate market, reach out to me. I was a lawyer at one of the biggest law firms in the world before getting into real estate, and I've helped numerous people relocate here from all over the country. Be happy to be a resource for you. My contact info is in the description below. Reach out anytime. Now let's dive into what happened in San Francisco in the back half of 2025, how it's a complete 180 from what we're seeing at the national level, and what we can expect in 2026. Now, unlike what we're seeing nationally, unfortunately for anybody looking to buy a place in San Francisco, it is getting absurdly more competitive. Buyers today have significantly less leverage than they did over the past year, 2 years heading out of the pandemic because of changes in the supply-demand equilibrium. And I believe those trends are going to intensify into the new year. In 2025, we saw just 19 more single-family homes list compared to 2024. Not 19%, 19. And in a city where thousands of homes sell every year, that's basically flat from a new listings perspective. And although we basically had no change in the number of new listings, there were much larger jumps in the number of sales, an over 5% increase in the number of homes sold and nearly 7% increase in the number of homes getting into contract. Remember, at the national level, we had inventory rising 13%. And remember, at the national level, we had 1% fewer homes sell in 2025 compared to 2024. And for condos, the data shows an even bigger drop, about 5.6% drop in the number of new listings, but an 11% jump in the number of condos selling and a 17.5% jump in the number of condos getting into escrow. So with new listings basically flat or falling and the number of sales rising significantly, we had major drops in overall inventory levels across property types in the city. And you can see that significant drop compared not just to last year but to the prior 3 years, especially in the back half of the year when interest rates trended closer to 6% instead of closer to 7% where they were at the prior year. And remember, I talked about monthly supply earlier at the national level rising from 3.8 months in November of 2024 to about 4.2 months in November of 2025. Well, we saw the opposite of that in San Francisco. Pretty significant drops in monthly supply, meaning significant upticks in demand in relation to existing supply. In other words, it got a lot more competitive and more seller-friendly in San Francisco over the past year. For single-family homes, monthly supply fell about 29% year over year and finished the year at under 1 month of supply. So basically, if no new homes came to market, all available homes would sell out in less than 4 weeks. That is insanely fast and indicative of a very unhealthy and unbalanced seller-friendly market. And for condos, there was an even bigger shift, 35% drop year over year, finishing the year at 2.3 months. Not as seller-friendly as the single-family market,, which was under 1 month, but much more seller-friendly than the same time last year. Another pivot from national trends that's indicative of a more seller-friendly and more competitive market in San Francisco, in contrast to what we're seeing nationally, which is a more balanced, more buyer-friendly market than in prior years, is the price cut percentage. At the end of 2025, about 15% of single-family homes on the market cut their ask price compared to 26% in 2024 and 35% in 2023. And for condos, 25% cut their ask price compared to 28% 2024 and 33% in 2023. So demand is up at current prices and current interest rates compared to what we saw last year. And what happens when demand goes up and supply goes down? Well, that's Economics 101. Basic economics teaches us prices rise, and that's what happened. The average price per foot of homes sold in 2025 was 3.5% higher than in 2024. The average sold price 4.7% higher, and the median sold price 4.6% higher. Even condos, prices for which had been steadily falling year over year, rose last year. For the first time in many years. The average price per foot of condos sold in 2025 was 1.6% higher than in 2024. The average sold price 1.6% higher and the median sold price about 1% higher. And these numbers are borderline insane in some of the more desirable parts of the city, in particular on the north side of the city. And that just really underscores the importance of location when you're buying real estate. In Real Estate District 7, which includes the Marina, Cow Hollow, Pacific Heights, Heights and Presidio Heights, all gorgeous neighborhoods, very walkable, a ton of food, a ton of shopping, great parks, beautiful views. The numbers for 2025 were staggering. The average price per foot of single-family homes rose 13.6%. The median sale price rose 23.6%, and the average sale price rose 13.7%. And for condos, the average price per foot rose 6.1%. Median sale price rose 9.4%. Average sale price rose 8.4%. So prices are accelerating across San Francisco. But they are really accelerating in some of the more desirable parts of the city. That is unquestionably a pivot from what we saw in 2022, 2023, and 2024. And it's a sign of what's to come in 2026 as more and more people move back to San Francisco because of return to office, because of new jobs in the AI space, because overall city conditions like crime and homelessness are improving, because we're getting a ton of new restaurants and retail spaces again., you should expect demand to continue rising and putting upward pressure on what is very clearly constrained housing supply. I've got an entire video about San Francisco's impossible comeback, all of the data backing it up, not just rhetoric about office vacancies, retail vacancies, crime, homelessness, tourism, and the housing market. I'll link that in the description below. If you wanna learn more about these trends, go check it out. But suffice to say, any way you slice the data, overall city conditions are improving, and that's having a direct impact on our local real estate market. And remember, all of this this is happening with interest rates still at around 6%. As of when I'm filming this video toward the end of 2025, President Trump hasn't announced who his next Fed chairman is going to be, but we know that President Trump is hell-bent on lowering interest rates. So it is not unreasonable to think that whoever he does pick might have more friendly policy toward lowering interest rates. And if the federal funds rate goes down and Treasury yields go down, we should expect interest rates, mortgage interest rates, to go down as well. I don't personally think we should expect major drops in interest rates, but we might get some movement closer to 6%, maybe the high 5% sometime next year. And even that slight downward movement unlocks a lot of affordability for a lot of buyers. So we'll likely increase competition as time goes on. So if you're thinking about buying a place in the city, it is never too early to start getting prepared for that competitive market. You need to understand how the market operates and the mechanics of diligence and offers on a very rapid timeline in the highly competitive market that we are about to face heading into 2026. And if you're a seller, this is obviously great news for you unless you happen to need to buy a new place after you sell your current one. But at a minimum, you will be selling into a brutally competitive market, a very seller-friendly market, and will likely get more money for your property than you would have if you had sold a year or two ago. If you're in either of these buckets and want to learn more about what's happening in your specific neighborhood, because every single neighborhood in San Francisco behaves very differently from each other, reach out to me. I've lived in the city for over 13 years. I've helped numerous people relocate from all over the country, both in and out of San Francisco. Be happy to be a resource for you. I'll put my contact info in the description below. Reach out anytime. And remember, if you like videos about San Francisco real estate, current events, new developments, lifestyle, or history, subscribe to my channel because I make videos about that stuff every single week. And make sure to watch the video that I made about San Francisco's comeback. I go over all the data supporting the positive trajectory the city is on. I'll link that in the description below. Go check it out. I hope you enjoyed the video, and I'll see you in the next one.
