San Francisco's real estate market is experiencing a dramatic and unseasonal surge, transforming it from one of the nation's lagging markets into one of its most competitive. In October, home prices and sales volume reached their highest levels since the market's peak in mid-2022, defying the typical autumn slowdown as a combination of factors drives intense buyer competition.
A severe lack of available homes, coupled with a wave of newly affluent buyers from the artificial intelligence sector and a strong stock market, has created a frenzied environment. Bidding wars are now commonplace, and even properties requiring significant renovation are attracting swift offers, catching many veteran real estate agents by surprise.
Key Takeaways
- San Francisco home prices and sales volume hit their highest point in October since June 2022.
- The median house price climbed nearly 6% to $1.85 million.
- Housing inventory on November 1 was down by a third compared to the previous year.
- 61% of all homes sold in October went for over the asking price, the highest rate in the Bay Area.
- The luxury market, with sales over $5 million, saw its strongest month in four years.
A Market Flipped on Its Head
The end of fall is traditionally a period of price reductions and slowing activity in real estate, as sellers try to close deals before the holiday season. This year, however, San Francisco is telling a different story. The market has shifted with incredible speed, going "from 25 mph in recent years to 100 mph in autumn 2025," according to Patrick Carlisle, chief market analyst for Compass.
This rapid acceleration has caught many off guard. The number of price reductions in October was approximately half of what it was last year and marked an eight-year low for the month. San Francisco stands as the only county in the Bay Area that did not see a year-over-year increase in price cuts, a stark contrast to national trends where reductions were up 20%.
"It has shifted from being one of the weakest markets in the Bay Area and the country to suddenly being one of the strongest," Carlisle noted.
This new reality is forcing agents to adapt their strategies on the fly. Nina Hatvany, a Compass agent, described how the current climate is pushing her to list properties that would normally undergo extensive repairs first, such as a $7 million fixer-upper in Pacific Heights with water damage. "Normally we would be like, ‘This all needs to get remediated, and then we need to stage it and bring it on next year and present it properly,’" she said. "And now we’re doing the opposite."
The Driving Forces
Several key factors are fueling this market frenzy. Lower interest rates have begun to ease the "lock-in effect," where homeowners were hesitant to sell and give up their low mortgage rates. Additionally, a booming stock market and the creation of new wealth from the city's thriving AI industry have injected a fresh wave of motivated, high-net-worth buyers into the market.
Inventory Crisis Fuels Bidding Wars
The primary driver behind the intense competition is a critical shortage of available homes. As of November 1, the number of listings in San Francisco was down by a third compared to the same time last year. This scarcity is acute, with the city being the only Bay Area county that didn't experience an annual rise in inventory this fall.
"Pretty much everything that’s good that’s on the market on the north side of town is sold," said Ted Bartlett, another Compass agent. He observed that the list of broker tours was the shortest he had seen in his 27-year career, signaling just how few properties are available.
With an abundance of buyers vying for a shrinking pool of homes, bidding wars have become the standard. In October, three-quarters of house sales and nearly half of condo sales closed for more than their list price. One notable example was a Duboce Triangle home that sold for $2.4 million, a staggering $600,000 over its asking price, after just one week on the market.
October Market by the Numbers
- Median House Price: $1.85 million (up 6%)
- 2-BR Condo Price: $1.26 million (up 1%)
- Condo Sales Volume: Up nearly 40% year-over-year
- Homes Sold Over Asking: 61%
Luxury and Fixer-Uppers Both in Demand
The market's strength extends across all segments, from entry-level condos to the highest echelons of luxury real estate. The luxury sector is particularly active, with home sales exceeding $5 million reaching their highest monthly total in four years. This trend is regional, as the seven counties comprising the San Francisco and San Jose metro areas recorded their highest-ever number of $5 million-plus home sales for the month of October.
Even properties that require substantial work are finding eager buyers, a sign of renewed long-term confidence in the city. "Renovations suddenly seem quite popular again," Hatvany commented. She explained that for buyers planning major remodels, issues like mold in the sheetrock are less of a deterrent since they intend to take walls down to the studs anyway.
Bartlett recently sold a fixer-upper in Noe Valley for close to its $1.5 million asking price. The property came with approved expansion plans that will likely require another million dollars in renovation costs. He sees this as a positive indicator of the city's future. "San Francisco government used to be ‘no, but,’ and now it is ‘yes, how?’" he said, referencing a more optimistic and pro-development attitude in the city.
While the current momentum is strong, experienced agents remain cautious. Hatvany advises sellers against waiting for a potentially even hotter spring market, warning that unforeseen economic shifts could derail the current upswing. In the meantime, the unexpected boom means a busy holiday season for many. "I’ve decided to keep my Christmas gifts very, very simple and make sure that I have plenty of time to deal with this," she said.
