San Francisco Real Estate
February 2025 Report
A New Year Begins
The Fed kept its benchmark rate unchanged; interest rates ticked down below 7%; stock markets
remain high (though sometimes volatile); consumer confidence turned a bit unsure about the
future. A terrible climate-related disaster rocked the state, with human and financial costs and
consequences that will take years to quantify. And for better or worse – you can make your own
evaluation – national and international politics have been thoroughly destabilized by new and
constantly changing developments, with yet uncertain effects on society, the economy and
housing markets.
But in local real estate, 2025 began with the usual new year rebound: The numbers of new
listings and of listings going into contract have bounced back from their annual low counts in
December, and both are almost certain to rise rapidly as we move further into the year. In the
Bay Area, we are already on the cusp of spring, which typically sees the most heated market
conditions of the year, and, not unusually, the highest median home sales prices.
“Our outlook for the U.S. economy is positive and offers a promising perspective on the housing
market in the year ahead. We expect the U.S. labor market to continue to cool in 2025, which
will reduce some of the pressures on inflation. And though we forecast mortgage rates to
remain higher for longer, we expect the rate lock-in effect to cool off throughout the year as
homeowners adjust to the new normal with respect to rates, therefore adding more inventory
to the market.” Freddie Mac Research, 1/28/25
This analysis and data were compiled by our friend Patrick Carlisle at Compass.
