Happy New Year! I spent some time over the holiday break looking into my real estate crystal ball and figuring out what we can all expect in 2026.
I’m happy to say that the San Francisco real estate market is looking good going into the new year. From interest rates and tech-driven demand to shifting buyer priorities and a surging luxury segment, here are my key predictions for what buyers and sellers should expect in the year ahead:
Interest rates will remain above six percent. Though we’re well below the eight percent interest rate peak seen in late 2023, rates are still not expected to fall below six percent this year. Buyers and sellers will continue to operate within these conditions as the era of ultra-low interest rates fades into the past.
First-time home buyers will jump into the market. The conforming loan limit in San Francisco just went up from $1,209,750 to $1,249,125, giving first-time homebuyers a nice boost in purchasing power. That also means access to better conforming loan interest rates and more favorable terms for qualified buyers.
Condos in city-core neighborhoods will sell quickly. Hayes Valley, the Mission, Dogpatch/Potrero, Noe Valley, Mission Bay, Yerba Buena and SoMa experienced a spike in interest in 2025 as AI industry workers looked to own homes close to their offices. Many buyers are also factoring in today’s high rents and deciding that owning simply makes more financial sense. I expect this momentum to continue in 2026, with condos spending less time on the market.
Second home buyers will be jumping into the condo mix. I’m basing this on the fact that I talked with at least five different buyers in late 2025 who are all considering purchasing a condo to use as their place in the city while maintaining a primary home elsewhere in California. The priorities for these buyers are units that have central locations near retail and transit, and parking is a plus. I’m chalking up this interest in San Francisco to a sense of optimism and improved perception of San Francisco since our new mayor took office.
Luxury will continue to lead. The big story of 2025 was the uptick in houses and condos selling above $5M. This activity to continue into 2026, with sales powered by new wealth generated by the AI industry.
There will be competition in the luxury single-family home market. Buyers snapped up 80 single-family homes above $4M throughout 2025. This was a step up from the 63 that sold in 2024, pointing to strong momentum in the luxury category.
Buyers will still need home offices. Though many tech workers are spending more time in the office, they’re still looking for a place in their home to set up private space for Zoom calls and hybrid work. Sellers should keep this in mind when staging their homes for sale.
Move-in ready, remodeled homes will generate multiple offers. Buyers are increasingly reluctant to take on renovations before moving in, given the time commitment, overlapping rent and mortgage payments and high construction costs. If you’re debating whether to update countertops, install hardwood floors, or re-tile a bathroom, the answer is yes. You’re more likely to get top dollar when you sell.
I am officially open for business in the new year! Please get in touch with me, Eileen Bermingham of Corcoran Icon Properties (415.823.4656 | eileen@insidesfre.com) if you’re planning to buy or sell real estate in the city this year. I’ve been selling real estate in San Francisco since 2002 and I have a long list of clients who’d be happy to talk to you about their experience working with me. Now is a great time to strategize so you can tick “buy or sell real estate” off your 2026 bucket list.