The year has kicked off with a flurry of luxury home sales in San Francisco, with January and February 2025 seeing an unusually high volume of these transactions. Many properties sold within short marketing periods, some attracting multiple offers or securing early offers from buyers eager to avoid a competitive bid. It seems that some of San Francisco’s wealthiest residents may be doubling down on their belief that the city is still a prime place to live, invest, and grow their families.
If this trend continues, it would be consistent with many summary reports about the luxury market released last year, such as an April 2024 report by J.P. Morgan Private Bank which indicated the luxury market is overperforming compared to the non-luxury market in recent years based on data from Miller Samuel, the National Association of Realtors (NAR) and Haver Analytics.
This wave of activity also appears to be reinforcing data from a report last year on the Bay Area luxury market released by Patrick Carlisle, the Chief Market Analyst of the brokerage where I work, Compass. The analysis revealed that this segment has been experiencing strong momentum since the heated end of the pandemic housing boom. It also notes that historically, luxury home sales in San Francisco follow a rather predictable seasonal cycle: rising in the spring, slowing in summer, rebounding in the fall, and dipping to their lowest in mid-winter.
And yet, the recent real-time sales data in the field from MLS closings indicate a potentially higher activity level than expected for these high-end homes in January-February, pointing to a pent-up demand in this market segment. In particular, 2258 Beach listed in early January and received over half a dozen competitive offers and ultimately sold for $6,800,000 — 13% over asking. Listing agent Lauren Klapper of City Real Estate described it as a “perfect storm” — a highly desirable property in a prime Marina location, hitting the market during a period of exceptionally low inventory for high-end buyers.
Agents noted that the majority of buyers touring these properties were also on the hunt in 2024, but waiting for the right home. Missy Wyant Smit, an agent also with Compass, observed, “When interest rates shot up dramatically in Summer 2022, everyone froze and the market became stagnant. But, we’ve seen that life goes on and people still need housing.”
The stock market’s rebound throughout 2024 has deepened the pockets of affluent buyers, who are also generally less sensitive to interest rate fluctuations. Meanwhile, renewed optimism surrounding San Francisco’s economic future — driven by the new mayor and rapid expansion of AI and tech industries — has further fueled demand for these homes.
A small town with limited housing
Interest rates are still high and volatile, but in the luxury market segment, Missy Wyant Smit explained that agents and buyers alike are laser-focused on inventory levels — “At the end of the day, it’s a small town and we don’t have that much product available (homes and condos) to sell. It feels like single-family home inventory is going to be very limited this year. If you are a buyer and targeting a house, you might not have a lot of choices this spring.”
The highly anticipated launch of five luxury condo residences at 1776 Green in Cow Hollow is drawing attention. Redeveloped by renowned Sutro Architects and listed by David Cohen of City Real Estate, these newly built homes are poised to help alleviate the inventory shortage in this market segment. Designed with discerning buyers in mind, they boast refined finishes, views stretching from the Golden Gate Bridge across the Bay to Russian Hill, expansive floor plans, private outdoor spaces, dedicated storage, and two parking spots per unit.
Jennifer Gottlieb-Shetrit is a realtor (CalDRE#: 02045019) at Compass serving the San Francisco Bay Area. She can be reached at [email protected] or www.JenniferShetrit.com.
