Jan 12, 2023 - News

Forecasting San Francisco's 2023 real estate market

Illustration of the year 2022, with a keyhole for a zero, which zooms in so you can see through the keyhole to the year 2023.

Illustration: Brendan Lynch/Axios

The San Francisco housing market is likely to remain in a lull this year despite still being one of the most expensive places to live in the country.

Why it matters: Recession fears and high-interest rates could keep would-be homebuyers away in 2023, but local experts say the calmer market could mean good deals for those looking.

What they're saying: "I'm expecting fewer instances of overbidding and multiple offers," Eileen Bermingham with Corcoran Icon Properties told Axios' Brianna Crane.

  • She added: "Buyers will be split into two camps: ones waiting for prices to fall, or those jumping on good opportunities."

Catch up quick: Last year, median housing prices across San Francisco dropped 6.2% from May to November — the sharpest decline among top U.S. metros, according to Zillow.

  • In 2023, overall prices, including single-family homes and condos, are expected to fall another 3.6%, Zillow predicted.
  • Demand also tapered last year, according to a Compass report, with home sales volume down 26% from 2021.

Of note: Recent layoffs across the tech industry could cool the San Francisco housing market further.

Yes, but: Local Compass agent Isabelle Grotte expects homes in desirable, walkable locations will "still sell quickly, with multiple offers and for strong prices."

  • She also reminds clients that interest rates will "eventually come down and they will be able to refinance."

Meanwhile, Bermingham says that current homeowners who purchased or refinanced when mortgage rates were at record lows are likely to postpone selling unless they really need to move.

  • This lack of movement will continue to strain housing inventory, she said.

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