The City View: May Update
As we enter the summer months, typically a slower season for our market, it will be interesting to see whether that trend holds true this year. Demand has continued to far outpace supply, and it feels as though buyers would eagerly absorb additional inventory if more homes were to come to market this summer.
The question on everyone’s mind is: how long can this extraordinary market continue?
What we are beginning to see now is a bit more inconsistency. Not everything—particularly condos—is selling quickly or commanding exceptionally high prices. While there are still standout outlier offers, not every property is trading significantly over asking. Historically, these can be some of the first signs of a shifting market.
When combined with the potential for continued job losses in the tech sector, some are beginning to question the longevity of this intense seller’s market. We do not anticipate a meaningful change happening overnight, but 2027 could look very different from 2026.
Two Weeks or Less from Listing to Sale has Become the New Normal
The severe inventory shortage has made San Francisco one of the fastest-moving markets in California. The average single-family home is selling in just 12 days, representing a 7.69% decrease compared to last April. The condo market has seen an even more dramatic transformation, with the average condo selling in just 14 days, a remarkable 57.58% year-over-year decline. Last April, the average condo sat on the market for 33 days, meaning today's condos are selling in less than half the time. For buyers, this ultra-fast pace leaves almost no room for deliberation, making preparation and decisiveness essential.
San Francisco is Firmly Entrenched as one of California's Hottest Seller's Markets
When determining whether a market is a buyers' market or a sellers' market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller's market, whereas markets with more than three months of MSI are considered buyers' markets.
With just 1.1 months of single-family home inventory and 2.3 months of condo inventory on the market, San Francisco remains a deeply entrenched seller's market across all property types. Both figures represent year-over-year declines of more than 40%, highlighting how dramatically conditions have shifted in favor of sellers. Notably, the condo market has transformed from a buyer's market last April (4.4 MSI) to a strong seller's market today. Until significant new inventory enters the market, sellers will continue to enjoy the upper hand in negotiations.
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