Key Findings at a Glance

• Median SF house price: $1.8 million (highest since 2022, up 9% year-over-year)

• Active inventory: 717 listings (down 35% year-over-year)

• Overbidding rate: 62% of sales (up from 51% last November)

• Houses: 82% sold over asking (averaging 16% above list price)

• Condos: 44% sold over asking (averaging 1.5% above list price)

• Current mortgage rates: ~6.19% (near 14-month low)

Will the Fed Rate Cut Lower Mortgage Rates?

The Federal Reserve dropped rates by a quarter point this week, as expected. But before anyone starts celebrating about their mortgage, there's a critical distinction to understand—one that remains among the most common misconceptions in real estate.

The Fed Funds Rate is simply the rate banks charge each other for overnight lending. It keeps the financial system's plumbing working smoothly. Mortgage rates operate in a completely different world—one driven by the 10-Year Treasury yield and lender risk assessments.

"This cut won't budge your mortgage rate," explains Sean Mamola, Global Luxury Specialist with Compass. "What it will do is bring down the cost of credit cards, auto loans, and personal lines of credit. That's real relief for households carrying consumer debt—and it signals the Fed is playing defense, trying to stay ahead of any cracks in the labor market."

Is San Francisco's Housing Market Really "Hot" Again?

The latest market data tells a clear story: San Francisco is officially one of the hottest markets in the country right now. Not recovering. Not stabilizing. Hot.

The median house price hit $1.8 million in November—the highest since 2022, up 9% year-over-year and a stunning 15% on a single-month basis. Two-bedroom condos surged to $1,297,500, also the highest in three years.

But here's what's really driving it: active inventory plunged 35% year-over-year to just 717 listings on December 1st. That's not a typo. The shortage is real, and buyers are responding accordingly.

What Does the Overbidding Data Tell Us?

This is where the data gets particularly instructive. Overall, 62% of sales closed over asking—up from 51% last November. But the split between houses and condos tells the real story.

Houses

82% sold over asking, averaging 16% above list price, with an average of just 26 days on market. House hunters are competing in a knife fight.

Condos

44% sold over asking, averaging 1.5% above list price, with 55 days on market. Condo buyers in neighborhoods like South Beach, Yerba Buena, and Mission Bay have more room to breathe—and negotiate.

"The condo market offers a fundamentally different buying experience right now," notes Mamola. "With nearly two months of average market time and less than half of units selling over asking, buyers have leverage that simply doesn't exist in the single-family space."

What's Fueling This Market Surge?

Compass attributes the surge to the "accelerating AI startup boom." The data tracks with ground-level observations: well-funded tech buyers are moving decisively on premium properties throughout Pacific Heights, Russian Hill, and Nob Hill.

October saw the highest number of $5 million+ sales in four years, and November's luxury activity was the strongest for that month since 2021. Meanwhile, mortgage rates are hovering near a 14-month low at 6.19%. The conditions are aligning for serious buyers.

"AI wealth is reshaping buying patterns in San Francisco's prestige neighborhoods," observes Mamola. "Secondary share sales from startups are creating liquidity for employees who need to be here for talent access. This buyer pool is expanding, not contracting."

Strategic Implications

For Buyers

• Waiting for things to cool off hasn't been a winning strategy—and current data suggests that won't change soon

• Condo buyers have leverage: longer days on market and lower overbidding percentages create negotiating room

• House hunters should prepare for multiple-offer scenarios and potential 15%+ overbids on desirable properties

• Coming Soon networks provide first access to properties before they hit the market—critical in this inventory-starved environment

For Sellers

• This is as good as the market has looked in three years for sellers who've been waiting for "the right time"

• Inventory scarcity means well-priced, well-presented homes are commanding premium prices and multiple offers

• Considering a pause for the holidays? A Private Exclusive listing allows sellers to quietly test interest with serious buyers while prepping for a strong public debut in the new year

• No extra days on market piling up during the slower holiday stretch

For Luxury Market Participants

• October's record $5M+ sales volume signals sustained demand at the high end—not a one-off spike

• AI wealth is reshaping buying patterns in prestige neighborhoods including Pacific Heights, Lower Pacific Heights, Russian Hill, and Nob Hill

• Secondary share sales from AI startups are creating liquidity for employees—expect this buyer pool to expand

Frequently Asked Questions

Will the Fed rate cut lower my mortgage rate?

No. Mortgage rates are tied to the 10-Year Treasury yield and lender risk assessments, not the Fed Funds Rate. The Fed cut primarily affects consumer debt like credit cards and auto loans.

Why is San Francisco inventory so low?

Multiple factors: homeowners locked into low-rate mortgages are reluctant to sell, new construction hasn't kept pace with demand, and seasonal patterns typically reduce listings heading into the holidays.

Is now a good time to buy a condo in SF?

The data suggests yes—particularly in neighborhoods like South Beach and Mission Bay. With 55 days average time on market and only 44% selling over asking, buyers have negotiating leverage that doesn't exist in the single-family home market.

What's driving the luxury market surge?

The AI startup boom is creating significant liquidity through secondary share sales and successful funding rounds. San Francisco's position as the epicenter of AI innovation is drawing well-funded buyers who need to be here for talent access.

Should I list my home during the holidays?

Consider a Private Exclusive listing—it allows testing interest with serious, pre-qualified buyers without accumulating days on market during the slower holiday period. It's a strategic way to position for a strong January public launch.

Ready to Navigate This Market?

Whether buying or selling, the data is clear: this market rewards those who move strategically. Understanding how these trends apply to specific situations and goals can make all the difference.

📞 Call or text: (415) 704-3640

📅 Schedule a consultation: Book a time to discuss your goals

Sean Mamola is a Global Luxury Specialist with Compass, specializing in San Francisco's premier neighborhoods including Pacific Heights, Russian Hill, Nob Hill, South Beach, Yerba Buena, and Mission Bay. With a background in luxury hospitality and deep expertise in the Bay Area market, Sean helps buyers and sellers navigate San Francisco's most competitive segments.