Market Update, January 2025 - Meg Tierney
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Market Update, January 2025

January 27, 2025

The number of new listings coming on market in 2024 rose from 2023, but remained low by historical standards, a common Bay Area county dynamic. Older homeowners who move (much) less often, and the mortgage lock-in effect remain significant factors.

Overall sales rebounded from the 2023 nadir, but remained far below longer-term averages: This trend was very common across Bay Area Counties. In the country as a whole, according to NAR, existing-home sales ticked down very slightly in 2024.

Luxury home sales rebounded much more dramatically than the overall market, hitting its second highest number in history. Soaring stock markets, especially in those counties where the AI boom was centered in 2024, were very big factors. Affluent buyers, buoyed by increases in their household wealth and rising home equity, jumped back in the market more than the general buyer – and affluent buyers were most likely able to pay all-cash, and thus not as concerned about interest rates.

2024 median house sales prices by county: Several counties hit new all-time highs, while others remain below the peaks hit in 2021 or 2022.

5-year appreciation rates illustrate how the big changes occurring since 2019 – pandemic, demographic shifts, inflation, interest rates, stock markets – impacted appreciation rates dramatically between counties. Santa Clara saw the highest appreciation rate, being the center of 2024’s enormous AI boom, but other counties were close behind. (The AI boom took a substantial hit today in stock markets, but it is far too early to come to any conclusions as to its future.) San Francisco saw the lowest 5-year appreciation rate, generally due to pandemic-fallout issues, which now appear to be fading. The full report includes 2024 year-over-year appreciation rates (from 2023) as well as the 5-year analysis below.

Remember that if affluent buyers become a larger component in the market, as occurred in 2024, that will help pull up median sales prices simply because they buy more expensive houses.

Median house sales price by county since 2011:

Median 2-bedroom condo sales prices in 2024. San Francisco has by far the largest condo market as a percentage of sales in the Bay Area, and the most substantial luxury condo market – especially of high-rise luxury condos – and this is reflected in its higher median sales price.

Looking at the last 5 years, San Francisco condo prices were negatively affected by demographic shifts triggered by the pandemic, such as work from home,  population decline, and (well publicized) social issues in the downtown area of the city. However, the median SF condo sales price did tick up in 2024 over 2023 (not illustrated in the chart below), suggesting it is beginning to recover.