San Francisco’s real estate market has been scorching hot since 2011. Reports of million-dollar homes attracting several buyers within days of their listings and selling at premiums within a couple of weeks have become commonplace. Fueled by a surge in high-technology companies settling in the area, San Francisco’s jobs recovery since the Great Recession has surpassed pre-recession levels, swelling the population with 70,000 more fully employed residents.

Along with the jobs market, per capita income has also fully recovered, rebounding from its drop to $74,942 in 2008 to $90,600 in 2014, which is nearly double that of California’s. However, with median home prices topping $1 million, the average San Franciscan spends a whopping 41% of his income on housing, prompting some analysts to wonder whether area income can continue to support the increasing home prices. The last time prices increased this quickly was during the 1997-2000 dot-com boom. When the bubble burst back then, home prices in San Francisco tumbled 10%.

Five-Year Market Trends

As of March 31, 2016, the median sale price in San Francisco was $1,156,950, an increase of nearly 12% over the prior year. Home prices hit a double bottom in 2011 and 2012, sinking first to $634,000, and, after a brief bounce back to over $730,000, falling to $620,000. Since then, home prices have been on a steep, albeit choppy, climb. The forecast for 2016 is a more modest 2.6% increase. With the housing market in San Francisco so closely linked to the performance of the technology industry, some analysts are predicting a housing price decrease should technology stocks falter in 2016.

Since its peak in 2004, home sales volume has generally trended sideways, hitting peaks and valleys along the way. In 2004, home sales volume climbed to 8,130. However, since 2011, the average volume has remained steady at above 6,000. At 6,100, sales volume in 2015 is at its lowest level since 2012, which may be a symptom of skyrocketing housing prices. Going forward, analysts foresee lower sales volume in 2016 as mortgage rates rise.

Property and Transfer Taxes

The average property tax paid in the city and county of San Francisco is 1.1743% per $1,000 of property value. For a home valued at the median sale price of $1,156,950, the property tax is $13,586. San Francisco’s property tax payments go towards a number of city and county organizations to fund infrastructure and debt repayment, including schools, a community college and Bay Area Rapid Transit (BART).

Transfer taxes are paid on a progressive scale, much like income taxes. For example, if the entire value of the home for sale is $1 million or more, but less than $5 million, the tax rate is $3.75 for each $500 or portion thereof. At the next level, homes sales worth between $5 million and $10 million are taxed at $10 per $500.

Most Expensive Neighborhoods

Nestled between swanky Nob Hill and the Presidio, Pacific Heights is home to some of San Francisco’s most opulent homes, with magnificent views of the city, the Golden Gate Bridge and the hills of Marin. At the end of 2015, the median sales price for homes in Pacific Heights was $6.525 million.

Just down the hill from Pacific Heights is Cow Hollow, which is a magnet for younger, high-earning professionals. The neighborhood is split into two by Union Street, which is packed with trendy bars, night clubs, cafes and art galleries. The median sales price is $5.05 million.

Further down the same hill, against a sweeping waterfront, sits the Marina. The Marina has a unique mix of small to mid-sized homes, stately homes, and apartment buildings, which are attractive to millennials and young families. Its signature attraction is the magnificent waterfront, with stunning views of the Golden Gate Bridge, Alcatraz Island and Marin. The median sale price in the Marina is $3.9 million.

Top Real Estate Websites is a very robust website offering a plethora of resources for homebuyers and sellers. One of its best features is an interactive map for learning about the various neighborhoods. For local real estate news and real-time market data,, the San Francisco Chronicle’s web domain, offers the best market coverage.

San Jose Real Estate Market

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