San Francisco's housing market update (2025 home prices starting to decline)

Testing, testing. How's it going, everyone? In this video, I'm going to talk about San Francisco's housing market and just how much home prices could drop in San Francisco over the next year. This is a market that is shifting rapidly in 2025. And if you're a home buyer or a real estate investor, you have to pay attention to these trends. So let's get into the data on San Francisco's housing market right now. And the first thing that you could see, everyone, is that home prices in the San Francisco Bay Area in Northern California, they're actually down 3.8% in the last 12 months. So prices here are already dropping. And not only that, in the last three years, prices in the San Francisco Bay Area are down 11%. So there's already a housing market correction playing out in the five-county Bay Area. The question is just how much more are these prices going to drop? And are we ever going to get to a point in San Francisco where it actually feels affordable to buy a house? Because right now, the typical home value across the San Francisco Bay Area is over $1 million. This is the most expensive place to buy a house in America. Even with the prices dropping 10% in the last three years, it's still extremely expensive to buy a house. And if you go on Zillow, which I'm going to do right now, everyone, we're going to look at some houses here in San Francisco on Zillow. We're going to see just how much are these mortgage payments? If you were to go and you're a home buyer in the Bay Area, how much would you have to pay in mortgage payments? I mean, folks, some of these amounts are really, really shocking, really, really crazy. If we just go north of San Francisco to Marin County, you can see there's some houses here, 1.15 million. 1.15 million for a two-bed, two-bath, 1,000 square feet. Monthly payment, let's zoom in on this, everyone. Monthly payment, $9,000 a month. $9,000 a month. How many people can afford $9,000 a month? If you do some simple math on that, that's over $100,000 a year. And let's just take a look at the price history on this house. Has it gone up? Has it gone down? Well, you can see, interestingly, the value and where this house is listed at today is actually at the same point it was at in 2019. We haven't really seen prices increase in the last five or six years in the Bay Area. This was a market that got hit pretty hard by the pandemic. Lots of people left San Francisco. Lots of people left San Francisco County, but even the surrounding areas, there was a big exodus. You guys can let me know if you remember that 2020, 2021, 2022, the migration absolutely plummeted, the home value growth slowed, the rents declined. But one has to wonder, is San Francisco on the bounce back right now? Because when you look at certain reports on the rental market, we're actually seeing that rents in San Francisco are going up a lot. San Francisco actually leads the U.S. right now in rent growth. And this is a shocking fact that I actually want to show some of you that could signal that maybe we're seeing a rebound start to play out. You can see here, San Francisco rents are up. So are eviction notices. San Francisco Chronicle is saying San Francisco apartment rents surged again in August, the highest level since April 2020. KTVU says San Francisco rent prices have surged 13 percent since 2024. So we are seeing some type of bounce back, maybe in urban San Francisco specifically, due to potentially the AI boom. There's some new companies in AI. They're hiring people. Some people are now moving back to San Francisco. They have a new mayor there. They're a little tougher on crime. Maybe there's a bit of a rejuvenation starting in downtown San Francisco, especially. However, I think we're going to see home prices continue to drop into 2026. And here's why. I'm going to show you some key data now on San Francisco's housing market. If you're a home buyer here, you got to pay attention to this data. And we're going to be looking at inventory data on ReVenture app. So ReVenture app is a tool that I'm actually going to be using for you guys in this video. It's going to help you understand where the trends are going in the San Francisco housing market. This is a national tool. You can look at this data for any city or state, but we're going to start here with inventory. And we're going to look at inventory and zoom back in here in the San Francisco, Oakland, Fremont metro area. So this is a big area. You could see how many counties do we have here? One Contra Costa County, two Alameda, three San Mateo, four San Francisco, five Marin. So this is a five county metro here in the San Francisco Bay Area. And then we have Santa Clara County down here as well, which I'm going to talk about. But let's just talk about the metro level inventory. You can see as of August, 2020, according to data on ReVenture app, which is sourced from realtor.com, there's 6,300 homes on the market in the San Francisco metro. You can see for the month of August, that's the highest level of inventory going back a decade. So we actually have a lot of relative supply on the market right now in San Francisco. There's a lot of inventory on the market. I don't know if you know that, if it seems like that, but there is compared to the long-term norm. Now at the same time, the home sales in San Francisco are way down. Buyer demand peaked in August, 2021 at 4,400 sales in August. Now we're down to 2,600 sales in August. So when you see the sales volume really low and you see the inventory at the highest level in 10 years, what does that tell you as a home buyer? It tells you it's good news for you. It's good news for you. It's shifted into a buyer's market in the Bay Area. It's shifted into a buyer's market. The demand is down. The inventory is up. Prices are down 3.8% in the last 12 months already. They're down 10% from the middle of 2022. But how much are they going to drop over the next 12 months? Well, to answer that question, which is a key question to answer, if you're a prospective buyer or seller, you're going to want to know, is my area going to go down? And by how much is it going to go down? You got to dig a little deeper into the data. You got to start looking at the county level statistics. You got to start looking at the zip code level statistics. Here's something that's kind of interesting. If we go to the county level data in the Bay Area, what do we see? Well, we can see values are down most already in the East Bay. So Contra Costa County and Alameda are down around 5% in the last year. And since the middle of 2022, they're down 11% in Contra Costa and 10% in Alameda. So East Bay is getting hit hardest now. You can see it's downtown San Francisco is actually down 15% over the last three years. So there's actually a sizable correction already playing out. You can see San Mateo did a bit better. It's only down 8%. Marin's only down 9%. And then Santa Clara did the best of them all. Santa Clara in the last three years is flat. So Santa Clara is the most expensive county here in the Bay Area. Prices here haven't really gone down yet. But even in Santa Clara County, where Silicon Valley is and all the tech people are, inventory even there is starting to go up as well. And ultimately, if you're a home buyer in Northern California right now, it can be a tricky time. You're asking yourself, yeah, there's more inventory. Yeah, prices are kind of dropping. But is now the time to really get into the market? The Fed just cut interest rates. Are interest rates going to drop? Are mortgage rates going to drop? So far, mortgage rates, they did drop a bit. Now they're going back up. When is the time to get into the market? And if you were to buy today in Northern California, in the Bay Area, Northern California, will you lose money? If you buy today, a year or two from now, will you regret it? Will you see that the value of your house has gone down below what you paid for it? And I think that's one thing everyone wants to avoid that, especially when you're paying $1.5 million for a house. If you're buying in this area of America, folks, you're probably not paying less than a million if you're buying a single family home. And so you just really want to be sure you know what you're getting into. And I'm actually going to give you guys some data now on the job market. Here, I'm going to shift a little bit. We're going to get back to the housing market data in a second. But I want to show you some data on the job market in the Bay Area, Northern California, because I think this is an important thing to understand. Because a lot of people are talking about the AI boom. And sure enough, there are definitely some more jobs happening because of AI boom. But I want to show you something that concerns me a bit. And this is a data point from Indeed that is here. It's the job postings index on Indeed in San Francisco, Oakland, Berkeley, metro area. And you can see prior to the pandemic, we were at a job postings index of 100. Then it went up to around 137 in 2022, so 37% more job postings. Now it's down to 67, which means a 33% decline in job postings on Indeed from before the pandemic. So what this is showing is that the job market in the San Francisco Bay Area is still really tough. So even though we are seeing certain AI companies take some office space and AI hire more, overall, the job market here is really, really tough. And I wonder if that's going to weigh more on the housing market in the future. Because while AI is obviously very helpful for software developers in terms of making them more efficient, we're also seeing that AI is leading to maybe a lot of layoffs in tech as a result. Big companies like Microsoft are laying people off. A lot of tech companies are trying to lower their headcount due to AI making their operations more efficient. And in the short term, maybe that's hurting actually San Francisco's economy and job market. I ultimately think we are going to see prices drop by more in the Bay Area over the next year, particularly in certain zip codes, everyone. Because when you look at some of this data at the zip code level, it really gets even more interesting, even more shocking, I would say. And by the way, I'm live right now. So if you guys are watching and you want to leave a comment, you want me to cover a specific area, feel free to let me know and I can cover it for you here. But let's just take a look at the zip codes. In the last year, what can we see? Well, you can see a little bit of a rejuvenation starting in some parts of downtown San Francisco, but we can see East Bay, Oakland, down to Fremont. Oh boy, this is an area that's getting hit very hard. Certain zip codes are down 11, 12% year over year. Certain zip codes here in Oakland are down 26% since the middle of 2022. 26% folks here in Oakland, in Piedmont, 20% declines. We can see a lot of 20% declines here in downtown San Francisco. So some of these areas have already dropped by a lot. And interestingly, if we go to ReVenture's overvaluation rate, ReVenture's actually saying some of these areas are undervalued now. ReVenture's data is saying some of these pockets in the Bay Area are actually undervalued. This is extremely rare because normally when we look at the housing market today, prices are overvalued in many of these areas, but actually they're undervalued here in the Bay Area. And this is something that is really different than a lot of other parts of the US. Most other parts of the US are overvalued. The Bay Area has seen values drop so much over the last couple of years that this market is now becoming undervalued. And I don't know, does that mean you should buy today if the market is undervalued or is there more downside? I think what it means is like, I think most of the crash has played out in San Francisco County and Alameda County. I think most of the crash has played out. I think we'll see values there drop a little bit more. Maybe in Marin County, there's still some more downside and Santa Clara County is still really expensive. But I don't think we're going to see much more of a crash play out in some of these areas that have already gone down 25%. If you've already gone down 25%, that's a big, big drop. And the question is for you, if you're a buyer right now, looking at this data, trying to make a decision on when and where you should buy, the one data point I would really suggest you guys start looking at is the re-venture price forecast score. What's our 12-month forecast for your city and zip code in Northern California? Because we're talking here about San Francisco, but we also have Santa Rosa and Vallejo and Modesto and San Jose and Merced and Sacramento. What are these markets looking like for you guys here in Northern California? You're really going to want to access our 12-month price forecast to see where the values are heading in your area down to your zip code. And yeah, we've got some people in the chat saying that this is a welcome surprise. I'm covering the Bay Area from Coors Light 2025 is saying this is a welcome surprise. Well, the Bay Area is a very interesting housing market, everyone. Very interesting housing market in the Bay Area. I think a lot of people really don't know that it's crashed. It's like certain zip codes have crashed a lot already. And this is something that is good news if you're a prospective buyer, the fact that values have already dropped by quite a bit. We have another person here requesting Milwaukee. I appreciate the request from Milwaukee. This is a California, Northern California, Bay Area live stream. We'll see if we get some requests from Northern California. If at the end we don't get any requests, then I'll do Milwaukee. So let's just zoom out for a second though and ask what's going on in California overall? So in California overall, values are down 1.6% according to data on ReVentureApp. 1.6% decline in the last 12 months. So California as a whole is correcting over the last year. And a lot of people didn't think this was going to happen. They were saying, oh, California is just going to keep going up. They were saying California is never going to go down. I hear that a lot actually sometimes on social media from people in California real estate. They say that California is impervious to a housing downturn, is what I hear people say. Well, we know that's not true. Parts of San Francisco and Oakland are down 25% the last three years. So we know that that's false. But one thing I think is really interesting is what happened to Northern California 15 years ago at the end of the last housing downturn. I'm going to give you guys a little history lesson here. Because yeah, you want to know the 12-month forecast. I'm going to reveal that to you in a second for the Bay Area. But what about the history of the Bay Area housing market? Because if someone tries to tell you, oh, you should buy now in the Bay Area because prices never go down, is what I hear a lot of people say in the Bay Area. Is that actually true? Is that actually true and supported by the data? Well, one thing to understand is that in the last housing downturn, home prices in California dropped 42% from 2007 to 2012. A lot of people don't know this. But yeah, home values got crushed in California in the last downturn. You can see here just like how much they dropped. They dropped by a lot. And even in San Francisco, they dropped by a lot. In San Francisco, values dropped 32% in the last downturn. In Stockton, they dropped 63%. In Sacramento, they dropped 49%. In Santa Rosa, they dropped 43%. In Napa, they dropped 42%. So we had these big down, I mean a crash, full-scale crash play out in the last downturn here in Northern California. And a lot of people don't know that. It's shocking to me how many people don't know that. We have a data point here on ReVentureApp. Percentage crashed from 2007 to 2012. That is a data point you're definitely going to want to look at, especially for your zip code. It's definitely worthwhile to know what the history of your zip code is and how much values went down in your zip code in the last crash. You can see here in downtown San Francisco, values went down 15% to 20%. In this downturn in downtown San Francisco, values have already dropped by more than that. So we have another data point here, percentage change from June 2022. What do you notice? There's bigger declines in this housing downturn in downtown San Francisco than there were in the 2008 crash. How many people know that? Well, you guys watching here now know that because I'm sharing the data with you. Very interesting that downtown San Francisco has already gone down more in this downturn than the last crash. Is it the same for Oakland as well? You can see Oakland, pretty similar. Some parts of Oakland went down 40% in the last downturn, but you can see the downturns in East Bay are more widespread this time around. Even Berkeley is getting in on the action. Berkeley is down 17% to 20% since the middle of 2022. Yeah, let's see. Oh, we have some interesting questions now from some locals here in California. Let's just drill into these questions, everyone, because I think you guys definitely have to understand what's going on. What's the local perspective here? HHdesign has an interesting question. He says, hey, Nick, it seems like the condos in SF have went down significantly since COVID. Are they good investments and will they go up again? Well, I'm going to point to the overvaluation rate. Our overvaluation rate for downtown San Francisco is actually undervalued by 30%, 40%, 50%. So I would say yes, buying a condo in downtown San Francisco is a good investment right now. I think there is some further downside left. Our price forecast is still predicting values to go down. But I think it's actually shocking how much some of these condos have gone down in value. And I think for the average viewer, you're still probably going to think that these are expensive, some of these condos. But for instance, you can buy a condo now in downtown San Francisco for $399,000. That's wild. You can't even buy a condo in Miami for $399,000. Now you can buy a condo in San Francisco for $399,000. If we look at the history here on this one, folks, look at the history. This sold for $382,000 in 2017. So this sold for $382,000 in 2017. And now it's priced at $398,000. So basically no appreciation over eight years. Almost no appreciation over eight years on this condo, which is tough maybe for the people who own this condo, but it's good for a prospective buyer. Let's take a look maybe at some other condos here. We've got a condo, one bedroom, one bath in the Mission. Is this the Mission? Well, $499,000. You can see it's got some nice windows, floor to ceiling windows, good views. Downtown San Francisco, 14 days on Zillow. What do we see? Oh my goodness, folks. Look at this. Zestimate history, minus 40% in the last 10 years. So 10 years ago, Zillow thought this condo was worth $839,000. It's now listed for sale at $499,000. I mean, folks, to answer your question, I think there's some good deals right now in downtown San Francisco. I mean, I would take a look. I mean, if you're someone who's thinking of buying in this area, I mean, I would definitely say this is an area to consider if you wanted to buy in downtown San Francisco, if you've been waiting to buy in downtown San Francisco, definitely check it out because a lot of condos have gone down by a lot over the last couple of years. All right, let's see. What else? We have a request here for Pacific Grove, California, 93950. Pacific Grove, 93950. Let's take a look at 93950 in Pacific Grove, California. Where is Pacific Grove, California? I see. So Pacific Grove, California is in, I guess, the Monterey area. 9395, what was it? 93950. So this is near Monterey. Values here are down 7.2% the last 12 months. Typical price of $1.35 million. Now, what do we think the 12-month price forecast is for this area? We think it's going to go down another 1% the next 12 months. So this is a market we think is going to be more stable. We think there's some slight downside here. However, we don't think there's going to be a crash here in 93950 due to the fact that, let's just take a look. Inventory, what's going on with inventory here? So inventory is, I mean, it's going up. It's going up, but it's not at a crazy level yet. So inventory is going up, not at a crazy level. Days on market, days on market is still low, below the long-term average. So when the DLM is below the long-term average, inventory is up, but not crazy. You get a slight downward forecast. Ultimately, I think, folks, that the Bay Area, I'm going to just say this. I know it might be a controversial thing. I think it's one of the few areas in America where there actually is some value to buy compared to what prices have been the last 10 years. Let's see. We have an interesting comment here from Tater who's saying his Silicon Valley friend has been out of work for over a year and traveled the world carefree, but is now starting to panic as no one is hiring. Yeah, I mean, that's definitely been a headwind. You know, the job market in the Bay Area is not great. It's definitely not great. You know, if you're lucky enough to get, you know, hook on to one of those AI companies, it can be pretty good, but the job market is still pretty tough. And Jonathan says, yeah, he's seen that happening for a lot of tech people. He knows, you know, I definitely know a lot of people in tech who've struggled to find jobs. He's saying some turned into YouTube streamers. Wonder how that's going for them. So you have to weigh those risks, right? You know, if you are going to buy in the Bay Area, understand prices have dropped, particularly in downtown San Francisco, particularly in Oakland, but the job market there is rough and there could be more downside. So ultimately, let's get into that price forecast now, because if you are a buyer investor in the San Francisco Bay Area, you want to understand the 12-month price forecast. So let's just take a look at that right now. And, you know, ultimately you got to drill into this data for your zip code, but on an overall level, on an overall level, let's go to our price forecast here. Where do we think prices are going to head the next year in the San Francisco Bay Area? We have a minus 4.2% price forecast for the San Francisco Bay Area next 12 months. We're going to knock down that typical value from 1.1 to 1.05 million, which is going to shave about $50,000 off a house for the typical house. If this forecast comes to fruition, you can see that this forecast is being driven by inventory, days on market, recent appreciation trends, all favoring buyers. We're now in a healthy buyer's market. This is the biggest buyer's market we've seen in San Francisco going back 10 years. That's great news for you as a home buyer. I would strongly suggest if you're looking to buy in this market and you've been waiting, definitely look for houses here. You should be able to negotiate discounts. You should be able to negotiate cheaper prices with sellers, and prices are already going down in a lot of areas. The question is, what's going on in your market? What I would suggest you guys do, just type in San Francisco and start looking at the 12-month forecast by zip code for your area. You can access the data under a premium plan on ReVentureApp. Premium plan is $49 a month. Ultimately, that's what? Less than 0.005% of the cost of buying a house in this area. Check out that 12-month forecast and the overvaluation rate. Those are two key data points you're going to want to understand as a home buyer in this market. Home price forecast and overvaluation are under popular data. If it's a minus sign on overvaluation, that means it's an undervalued market. Make sure to check out that data, everyone. Until next time, this is Nick from ReVentureApp.