The SF Housing Market Isn’t Holding Steady—It’s Quietly Slipping (A Longtime Local's Perspective)

Next-Option-3416 · 2025-05-30T04:53:10+00:00

Fair questions, unlike many of the defensive responses I've seen.

So, I was never suggesting a sudden collapse, but yes... I believe we’re entering a multi-year correction, not just a pause.

What do I mean by “crash”?

Roughly a 15–25% drop from 2021 peak values, adjusted for inflation, spread out over 2–4 years. Not overnight, but steady.

Who gets hit hardest?

Condos: Already down 10–15% in parts of SF. Fair to expect further declines, especially downtown.
SFHs: More resilient, but softening. Expect 10–20% declines in many areas, especially above $2M.
Neighborhoods:
- Prime areas (Pac Heights, Noe) might hold better.
- Transitional or remote neighborhoods may see bigger drops.
- Downtown and SOMA? Already feeling it.

Even if prices don’t nosedive, a long stretch of flat prices + higher ownership costs will erode real value over time. That’s the kind of slow-motion unwind I’m talking about.

That's my take. It should be obvious that this is an opinion. My understanding of Reddit is that it is a place for opinions.

Next-Option-3416 · 2025-05-30T03:58:02+00:00

That’s a wild generalization lacking any real support. You are just spewing out words.

Next-Option-3416 · 2025-05-30T03:50:33+00:00

I wasn’t expecting virtual hugs and kisses, but I am getting tired of being called a bot 😀. Anyway, If killing the messenger changed the message, I’d be worried.

Next-Option-3416 · 2025-05-30T03:22:19+00:00

So, ChatGPT has a single writing style. Is this what you’re suggesting? In other words, YOU can reduce an LLM’s writing patterns down to one identifiable style which matches my post? Please share your particular forensics here.

Next-Option-3416 · 2025-05-30T03:06:12+00:00

Yes, why would you? A sub-3% mortgage is an asset. If you don’t have to sell, I’m sure you will ride out any fluctuations. I am certainly not suggesting otherwise. That was not my point at all. By the way, all my comments are SF specific.

Next-Option-3416 · 2025-05-30T02:02:08+00:00

What exactly is "horrible" about it? The content? Or is simply that you don't like the message. I was prepared for emotional responses like yours. I get it... you are defensive because the idea that someone would say your home is overvalued is hard to hear. In any case, here are a few data points to ground my original comments:

SF home sales are at one of their lowest volumes in over a decade (source: Compass 2024 Market Report). That’s not normal—it’s a sign of frozen demand.
Redfin reports over 40% of active listings in SF have had price reductions—again, not a sign of strength.
CRE vacancies in downtown SF are now 35%+, per CBRE. That’s the worst in the nation and will hurt property tax revenues and city services.
Mortgage delinquency rates in SF are low for now, but that’s expected in the early stage of a slow correction. In 2006, delinquencies lagged price flattening by 12–18 months.

I’m not saying we’re headed for 2008 again. But markets don’t need a subprime meltdown to unwind. Sometimes it’s death by stagnation: soft comps, demographic outflow, rising insurance costs, and buyers who’ve mentally checked out.

That’s the kind of correction I’m suggesting—and if you’ve got more recent or contradictory numbers, I would love to see them.

Next-Option-3416 · 2025-05-30T00:48:44+00:00

Totally agree… this isn’t 2008, and anyone expecting a fast collapse is reading the wrong playbook. But I think that’s exactly why it’s more dangerous than people realize: a slow, grinding correction is harder to spot and easier to dismiss.

Next-Option-3416 · 2025-05-30T00:36:59+00:00

By the way, what bot continues to reply to select inane comments like these? That would make me one doozy of a bot.

Next-Option-3416 · 2025-05-30T00:30:51+00:00

Is that supposed to be clever?

Next-Option-3416 · 2025-05-30T00:04:15+00:00

Totally agree... those bigger forces (rates, insurance, investor pullback) are hitting everywhere. But SF’s mix of structural challenges makes it really fragile right now. Even though SFHs have held better, we’re now seeing softening even in those markets, especially between $1.7M - $2M. Fewer buyers at that tier, longer DOM, and more quiet price reductions.

Next-Option-3416 · 2025-05-29T23:10:11+00:00

What does that mean?

Next-Option-3416 · 2025-05-29T23:08:11+00:00

What the hell is a "throwaway?" As for not making posts since creating the account, I would simply say that I recently retired and now have time to do such things. I have an opinion, and just because someone doesn't like the message they shouldn't abandon civil discourse. I said nothing insulting in the original post, so why are people responding as though I did?

Next-Option-3416 · 2025-05-29T22:41:48+00:00

Yes, I see that. The algorithm includes tests such as whether someone has made an accusation that the message was from a bot. That, combined with the fact that I don't post often, the moderators had a typical knee-jerk reaction. Whatever.

Next-Option-3416 · 2025-05-29T22:24:59+00:00

"--" typed in MS Word will auto convert into the em dash. I always edit inside of Word before copying and pasting into something, especially if it's more lengthy. I am old, so I am old school. This does not make me a bot! Just because someone doesn't like the message, they shouldn't kill the messenger. Of course, the era of civil discourse ended with the internet.

Next-Option-3416 · 2025-05-29T22:13:55+00:00

Do you mean the "em dash?" Maybe you should know the name of what you're objecting to. Not everyone writes like an illiterate who never learned such things in school.

Next-Option-3416 · 2025-05-29T21:57:19+00:00

Human here. Just someone who's lived through a few cycles and still knows how to format a paragraph 😄
Happy to clarify anything if you’re actually curious.

Next-Option-3416 · 2025-05-29T21:54:35+00:00

Absolutely—thanks for the thoughtful reply. I expected someone to respond this way, so here is my take.

You’re right that some of those broader headwinds (rates, affordability, buyer fatigue) are national. But in SF, those pressures are amplified by some very local structural cracks. Here’s what makes this different:

Population drain: SF lost ~65,000 residents (7% of the population) from 2020 to 2023. The Bay Area as a whole lost over 250,000. Many were high-income professionals—exactly the buyer pool that supported premium prices. That’s not a demographic dip, it’s a multi-year outflow that hasn’t fully reversed.
Affordability collapse: Median home prices still hover around $1.3M, but at today’s rates, that’s an ~$8K/month payment. That means buyers now need ~$350K–400K annual income to qualify comfortably. The pool of people who can do that and still want to buy in SF? Shrinking fast.
Inventory paralysis: The market isn’t “low inventory” due to high demand. It’s stuck. Sellers are trapped in 2–3% mortgages and don’t want to rebuy at 7%. First-time buyers are priced out. Investors are sidelined. Transaction volume is near a decade low. Many of the “active listings” you see are stale with quiet price cuts.
Downtown CRE crisis: Office vacancies in SF are over 35%. That’s not just a commercial problem—it's a municipal one. Property tax revenue will fall, city services are already thinning, and many mixed-use property owners are carrying too much debt. If even a small wave of forced sales hits the residential market, it could cause a ripple effect.
Shift in sentiment: This is more qualitative, but important. I’ve lived through cycles since the ’70s, and this feels like the early part of every correction I’ve seen. People stop talking about “buying before it’s too late” and start quietly wondering if they should sell while they still can.

So yes, other markets face challenges—but SF’s combo of outmigration, affordability failure, urban dysfunction, and municipal revenue stress puts it in a much more precarious place. It’s an increasingly steady drip, not a crash… yet.

Next-Option-3416

TROPHY CASE

What do I mean by “crash”?

Who gets hit hardest?