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

Related Articles
  1. Personal Finance

    How Much Money Do You Need to Live in San Francisco?

    Learn how much it costs to live in San Francisco and how the amount varies based on whether you are a student, a professional or an unemployed job-seeker.
  2. Managing Wealth

    The 10 Most Expensive ZIP Codes in San Francisco

    In addition to its expensive home market, San Francisco has an increasingly competitive rental market, with quick turnaround in both.
  3. Managing Wealth

    The Most Expensive Neighborhoods in San Francisco

    Learn about the city of San Francisco and why rent has increased so much in the past eight years. Discover more about the top five most expensive neighborhoods.
  4. Personal Finance

    Traveling to San Francisco on a Budget

    Discover how to vacation in San Francisco on a budget, and learn about the abundance of entertainment the city offers at little to no cost.
  5. Investing

    Buying vs. Renting in the San Francisco Bay Area

    Buying vs. renting in the San Francisco Bay Area is a conundrum: Both are pricey. How to decide.
  6. Managing Wealth

    The 5 Most Expensive Places To Buy A Home

    Find out what makes these areas so desirable to live in despite the high costs of real estate.
  7. Investing

    5 U.S. Cities Too Expensive To Buy A House In

    Whether it's the lifestyle or career opportunities, these cities continue to attract people putting pressure on available land and housing.
  8. Investing

    9 Gentrifying Neighborhoods in the Bay Area

    There are a number of gentrifying neighborhoods in the Bay Area, which is home to some of the highest rents and home prices in the nation. Here are nine.
  9. Investing

    Buying a Home? The Best Places Share this Feature

    The most lucrative areas to invest in a home are cities where job growth is robust.
  10. Personal Finance

    Top 10 Most Expensive Cities in the U.S.

    New York City tops the list of most expensive cities in the U.S., and five of them are located in California.
Frequently Asked Questions
  1. When Does a Corporation Decide to Refinance Debt?

    Favorable market conditions or the strengthening of a credit rating may lead to corporate refinancing.
  2. What is the difference between an inter vivos trust and a testamentary trust?

    The difference between inter vivos trusts and testamentary trusts.
  3. Who are Target's (TGT) main competitors?

    Learn more about the discount retailer Target and its competitors. Find out some of the things discount retailers do to increase ...
  4. Why would a company issue preference shares instead of common shares?

    Learn about some reasons corporations might issue preference shares and why investors might value them more than common shares.
Trading Center