San Francisco Real Estate Cycles: A Look at the Past 10 Years

Like many highly lauded, yet incredibly complex marketplaces, San Francisco real estate cycles have long been a study in contrasts. It's a city where development moves at breakneck speed but can also seem years from fruition, and where optimism often exists alongside volatility. Over the past ten years, from 2015 to 2025, the city has weathered tech booms and busts, global uncertainty, and pandemic-driven reshuffling. Through it all, one truth has held steady: San Francisco remains one of the most dynamic and resilient housing markets in the country.

In 2015, San Francisco's housing market appeared to be on top of the world. Prices and rental rates had been climbing steadily since the recovery from the Great Recession, spurred on by a roaring tech sector and venture capital optimism. Demand far outpaced supply. Bidding wars were common, especially in sought-after neighborhoods like Noe Valley, Cow Hollow, and Russian Hill.

But 2016 marked a turning point—albeit a soft one. Rather than a dramatic correction, the market eased gently. Prices plateaued. The city's rental market in particular saw notable drops, especially at the top end, with rents for luxury apartments falling. Developers had responded to years of strong demand by building a wave of new rental units, but when supply finally caught up in the latter part of the year, the market cooled. Yet, high-end single-family homes largely held their value, offering early signs of their future resilience.

From 2017 to 2019, San Francisco's real estate market experienced a rebound. With the economy humming and a bevy of technology-related IPOs, including Dropbox, Lyft, Pinterest, Roku, and Uber, stoking wealth creation, buyer enthusiasm surged—especially in the luxury tier. Each spring selling season brought strong appreciation, boosted by record-low interest rates and increasing demand from both domestic and international buyers.

This period marked a rise in the $5 million–plus market, which historically had been a more niche space. Upscale neighborhoods like Sea Cliff and Presidio Heights saw renewed interest. At the same time, even traditionally lower-profile areas such as Glen Park and Inner Sunset began attracting attention for their relative affordability.

Condos performed well, too, although not quite as dramatically. The city's high-rise developments—many of which had come online in the previous five years—were still new enough to attract urban professionals who wanted sleek design, amenities, and a central location.

When COVID-19 first hit in early 2020, the San Francisco market braced for the worst. And for a brief time—April and May 2020, to be exact—it looked like the pain would be severe. Lockdowns, economic uncertainty, and a shift toward remote work triggered a sharp drop in demand for all property types in urban centers. Many buyers and renters fled for suburban markets or quieter towns across Northern California. Prices for centrally located condos fell, and listings lingered.

But then came the rebound.

By late 2020, the market began turning around with surprising speed. Spurred on by mortgage rates cratering to historic lows, markets across the country experienced a flurry of activity. San Francisco's single-family homes—particularly those with backyards or space for a home office—became hot commodities. In 2021, the city recorded more than 7,500 closed transactions, an impressive feat considering the headwinds.

This was a moment that redefined what buyers were looking for. Lifestyle features—outdoor space, extra bedrooms, neighborhood walkability—grew more important than proximity to an office tower or downtown nightlife. Luxury buyers, in particular, gravitated toward turnkey properties in quieter enclaves like Forest Hill, St. Francis Wood, and even the western edges of the city, where larger lots and better views were available.

In 2022, the momentum slowed—partly as a result of national monetary policy and partly due to local economic shifts. As the Federal Reserve raised interest rates, affordability shrank overnight. Meanwhile, tech companies that had spent the last decade expanding aggressively began reversing course. Layoffs hit key sectors in San Francisco, notably Information and Professional Services—two pillars of the local economy.

Median home prices began to retreat. Single-family homes that had reached eye-watering highs fell back toward pre-pandemic levels, reaching seven-year lows in terms of median sale price, hovering around $1.29 million by the end of 2023. Condos were more acutely impacted, overall losing as much as 20% their value between December 2021 and December 2023.

But again, the market's reaction was nuanced. Not all neighborhoods were hit equally. On the city's west side—places like the Outer Sunset and West Portal—home prices continued to edge upward, thanks to persistent demand and a limited supply of inventory. In contrast, areas dense with condominiums, such as SoMa, the Financial District, and South Beach, it took a bit more time to regain market footing.

Affordability also became a more profound concern. Compared to 2020, monthly payments for a mid-range home had nearly doubled, even as income growth remained comparatively modest. For many would-be buyers, the dream of homeownership in the city was put on pause.

By late 2023, signs of stabilization emerged. While the headlines often highlighted ongoing price declines, other indicators told a more balanced story. Transaction volume began to rise again. In early 2025, home sales were up dramatically year-over-year. That increase came as median prices for houses and condos leveled off, with buyers finding more amenable opportunities than in the four years prior.

Perhaps most importantly, inventory remains tight. Single-family home supply is particularly constrained, hovering below the three-month mark that typically defines a "balanced" market. For sellers, that imbalance created leverage. For buyers, it reinforced the urgency of acting quickly and decisively when the right opportunity appeared.

Neighborhood preference also began to reassert itself. Buyers honed in on homes that combined value with lifestyle. Areas like Noe Valley, Inner Richmond, and Potrero Hill—offering a mix of charm, amenities, and outdoor space—remained in high demand.

Looking back over the last ten years, the nature of San Francisco real estate cycles becomes clear. It's a market defined by sharp peaks, brief valleys, and steady long-term growth. External forces—tech IPOs, interest rates, pandemics, or policy shifts—have all played a role, but few outside influences can ever shake the city's historic desirability.

Luxury single-family homes, in particular, have proven to be the city's most stable and coveted asset. Even when other sectors faltered, these properties retained their appeal, commanding premium pricing thanks to location, architectural character, and rarity. Condos, while more vulnerable to market swings, are showing signs of renewed life—especially as buyers recalibrate expectations and long-term value.

And now, past the midway point of 2025, San Francisco real estate stands at a moment of cautious optimism. Price growth has slowed, but underlying demand remains strong. While affordability continues to challenge entry-level and even mid-tier buyers, what many hope to be a transformative residential real estate development across the city is on the horizon. In addition, the high-end market continues asserting its strength. Low inventory levels and a renewed focus on quality of life are likely to keep prices stable—or rising modestly—in the coming years.

For buyers, investors, and sellers, understanding the cycles of the past offers clarity for the decisions of today. If you're interested in discovering more about current and future opportunities in San Francisco, contact Novo Real Estate today to begin your Bay Area real estate journey.