San Francisco Real Estate Update | January 2026
A Message from Max Armour
The San Francisco market has entered 2026 with a level of momentum we haven't seen in years. Following a stabilizing 2025, the combination of the AI-driven "Gold Rush," a record-breaking stock market, and stabilized interest rates (now hovering in the low 6% range) has triggered an early start to the spring selling season.
Key Q4 Takeaways for San Francisco Real Estate Report:
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Market Resurgence: San Francisco's real estate market experienced a significant rebound in Q4 2025, driven by the city's AI startup boom. This has transformed San Francisco from the weakest market in the Bay Area to the strongest, with demand far outpacing supply.
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Record-High Median House Prices: The Q4 2025 median house sales price surged to its highest quarterly level since Q2 2022, marking a 12% increase from Q4 2024. The city's median house sales price is expected to reach a new high in 2026.
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Luxury Market Growth: The luxury home market is particularly competitive, with median house and condo prices in high-end districts like Pacific Heights, Presidio Heights, Cow Hollow, and Marina hitting new peaks in 2025. Sales of homes priced at $5 million+ rose by approximately 23% year-over-year.
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Condo Market Recovery: While not as heated as the house market, the condo market showed substantial recovery, with the Q4 2025 median condo sales price rebounding from Q3 and increasing by 4.5% year-over-year.
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Low Inventory Levels: Active listings on January 1, 2026, hit their lowest count in many years, reflecting the typical seasonal trend. Inventory is expected to increase as the market picks up in the new year.
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Buyer Demand Outpacing Supply: The absorption rate in December 2025 was double the percentages seen in December 2024, 2023, and 2022, indicating a highly competitive market with strong buyer demand.
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Economic Factors: Interest rates are near multi-year lows, and stock markets are at or near all-time peaks, contributing to increased buyer confidence and activity.
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Spring 2026 Outlook: With buyers re-energized and inventory still low, the spring selling season is expected to be particularly heated, barring any unexpected economic disruptions.
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Neighborhood Highlights: High-end neighborhoods like Pacific Heights, Presidio Heights, and Cow Hollow continue to lead the market with record-breaking sales prices, showcasing the city's appeal to affluent buyers.
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Quick Stats at a Glance
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Median House Price (SF): $1,662,000 (+8.6% YoY)
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Avg. Days on Market (Houses): 15 days
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Inventory Level: <0.5 Months of Supply
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Luxury Sector: 23% increase in $5M+ sales vs. last year
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Optimistic Future: The combination of economic recovery, the AI boom, and sustained buyer demand positions San Francisco for continued growth in 2026, making it an exciting time for real estate professionals and investors in the city.
Explore the Full January Report -> Click Here: SF Market Report January 2026
Whether you are looking to trade up, invest in the AI boom, or simply want a tailored valuation of your home in this new market, I am always here to provide the insight you need to succeed.
Best,
Max Armour Luxury Real Estate Advisor
Compass | San Francisco & Marin County
MaxArmour.com Over $2 Billion in Sales | Top 1% of SF Agents
