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San Francisco’s residential real‑estate market has slipped back into distress, with recent data showing a sharp decline in home‑sale activity and falling median prices. Over the past six months, the city’s median single‑family home price has dropped by roughly 12 %, the largest quarterly slide since the 2020‑2021 boom. The slowdown coincides with a rise in mortgage rates, which have climbed to the mid‑7 % range, dampening buyer demand and pushing many prospective homeowners toward the secondary market.

The market contraction is compounded by a tightening supply of new listings. Inventory levels have fallen to a 3‑month supply, well below the 6‑month threshold that typically signals a balanced market. Additionally, the region’s high cost of living and persistent wage stagnation have tightened affordability, leading to a surge in rent‑to‑income ratios that exceed the 30 % benchmark. Local housing authorities report that the number of households relying on public housing assistance has increased, underscoring the broader affordability crisis.

City officials and real‑estate analysts warn that if mortgage rates remain elevated and inventory does not rebound, the downturn could deepen. While some developers are exploring mixed‑use and affordable‑housing projects to diversify portfolios, the immediate outlook suggests a continued decline in sales volume and home‑price appreciation, leaving many residents and investors navigating an uncertain market environment.