San Francisco has seen an astonishing strengthening of its real estate market in recent months, presumably due to its rapidly accelerating AI start-up boom. Rents are rising at the fastest rate in the country and median sales prices have risen year over year. September sales and luxury home sales, as well the number of listings going into contract, all soared higher than in September 2024. New-listing activity almost doubled from August, but year-over-year, the number of active listings as well as the quantity of price reductions plunged. Increasing demand coupled with declining supply has added enormous pressure to the city’s market.

October sales data will give us further insight into the autumn selling season, before activity typically begins to slow down in November for the mid-winter holidays. As of early October, 30-year mortgage rates, at about 6.3%, were essentially unchanged from early September (but well down from 7% in early 2025): The Fed’s first 2025 reduction of its benchmark rate, of .25%, had little effect, though consensus opinion is that further cuts are probably coming before the end of the year. Inflation continued to tick up slightly, while stock markets hit new all-time highs. Nationally, consumer confidence remained low, with significant concerns regarding personal finances, employment and inflation – though affluent consumers deeply invested in stock marketswere less concerned than low and middle income segments.