2026 Market Predictions and a Look Back on Q4 of 2025

If 2025 proved anything, it’s this. The San Francisco real estate market is very much alive. Capital from AI and tech pushed demand higher and patience lower. By Q4, buyers were decisive, competitive, and often showing up with cash.

What’s different now is that this momentum is not just about housing. It reflects a broader renewed confidence in San Francisco itself. Under the leadership of Daniel Lurie, the city has sharpened its focus on public safety, economic recovery, and restoring pride in San Francisco as a place to live and build a future. That shift is being felt on the ground.

That renewed confidence in the city, combined with strong economic tailwinds, is reinforcing housing demand across price points and setting a firm foundation for 2026.

Here’s what mattered most as the year closed, and what it signals heading into the year ahead.

The Most Competitive Sector, $2M to $2.5M Single Family Homes

The most competitive sector of the San Francisco housing market continues to be single family homes closing between $2M and $2.5M, many of which are intentionally listed closer to the $1.5M range to drive competition.

Across the full year, 280 homes sold in this range, averaging 15% over asking with an average of 22 days on market — already exceptional performance by any measure.

What makes the story even more compelling is Q4 2025. In just three months, 86 homes closed (nearly 31% of the entire year’s sales), while buyers drove pricing to an average of 20% over asking and shortened market time to 20 days. Rather than cooling as the year closed, this segment accelerated, clearly signaling growing buyer confidence and positioning the $2M–$2.5M single-family market as one of the most reliable indicators of San Francisco’s housing momentum heading into 2026.

Buyers competing in the $2M to $2.5M range tend to be highly motivated and ready to move quickly. They understand the market, track recent sales closely, and are not hesitant to write aggressive offers when a home checks the right boxes, including offers $700,000 or more over asking in neighborhoods like the Richmond. These buyers recognize the level of competition and the risk of hesitation. Moving slowly often means paying more for the same home a few months later as pricing resets with each new closed sale.

The Pulse of Q4, The Numbers…

Sales activity accelerated into the end of the year. A total of 617 single family homes closed in Q4, representing a 4.3 percent increase year over year, while the median sale price reached approximately $1.8M, up 12.5 percent annually.

The year closed with strength. Volume and pricing both confirmed that buyers who paused earlier in the cycle re-entered the market with clarity, confidence, and a willingness to compete.

Luxury Took Center Stage

The upper end of the market was a standout in 2025, with a meaningful increase in activity.

• 11 percent of Q4 house sales closed at $4M or higher
• 10 homes sold between $10M and $17.75M
• All of these ultra luxury sales occurred on market, not quietly off market

Even at this level, competition remained strong. Well designed homes with views, parking, and architectural pedigree consistently drew multiple buyers. Cash played a significant role in these outcomes, reinforcing the advantage of clean terms at higher price points.

2026 Outlook, Market Predictions

1. Single Family Homes Will Stay Competitive, Especially in Key Value Driven Neighborhoods

The single family home market is not cooling off. Inventory remains constrained and buyer demand remains deep. Multiple offer situations and strong competition are likely to continue, particularly in neighborhoods that still offer relative value.

The Richmond and the Sunset remain especially attractive for buyers seeking single family homes with space, light, and long term upside. These areas continue to draw well qualified buyers who are prepared to compete when homes are priced correctly and presented well.

2. Strength in Single Family Homes Will Continue to Lift the Condo Market

As pricing pressure and competition persist in the single family home segment, more buyers will look toward condos as a practical and strategic alternative.

At the same time, rising rental prices are improving the buy versus rent equation. This combination is supporting the condo market, particularly in well located buildings with strong reserves and reasonable HOA dues. The recovery will be uneven, but the direction is clear.

3. The Luxury Single Family Home Market Will Have Another Strong Year Fueled by AI Wealth

The luxury market is operating on a different cycle. Capital from AI, liquidity events, and generational wealth continues to flow into San Francisco real estate.

Homes offering exceptional design, views, privacy, and location remain highly sought after. Cash buyers will continue to play a meaningful role, keeping this segment resilient and competitive regardless of broader market noise.

4. The Market Will Start Earlier Than Normal in 2026

Traditionally, Super Bowl Sunday has marked the psychological start of the spring market. In 2026, that timeline is likely to shift forward.

Expect more inventory to launch earlier than usual and stronger buyer activity in January. Buyers who paused during the holidays are already re engaging, and sellers are motivated to capture early year momentum before competition increases. Those waiting for the usual spring kickoff may find themselves arriving late to a market that is already in motion.

As we head into 2026, the San Francisco real estate market feels active, thoughtful, and opportunity driven. Whether you’re just beginning to explore a move, quietly watching your neighborhood, or thinking about a next step later this year, having the right context makes the process far less overwhelming. If a conversation would be helpful, I’m always happy to share insight, talk through what I’m seeing on the ground, and help you make sense of where the market is headed!