Leave a Message

Thank you for your message. We will be in touch with you shortly.

Existing home sales posted their strongest year-over-year gain in quite some time, signaling that buyers are finally coming off the sidelines.

Existing home sales posted their strongest year-over-year gain in quite some time, signaling that buyers are finally coming off the sidelines.
The Big Story
Quick Take:
  • Median home sale prices surged past last year's levels in May, as the spring selling season continues to build momentum.
  • Inventory levels have climbed back to where they were at this time last year, giving buyers more options heading into the summer.
  • Existing home sales posted their strongest year-over-year gain in quite some time, signaling that buyers are finally coming off the sidelines.
Note: You can find the charts & graphs for the Big Story at the end of the following section.
*National Association of REALTORS® data is released two months behind, so we estimate the most recent month's data when possible and appropriate.

The spring rally is in full swing
The spring selling season has delivered exactly the kind of price action that sellers were hoping for. The median home sold for $429,300 in May, representing a 2.83% month-over-month increase and a 1.32% year-over-year gain. This marks the fourth consecutive month of month-over-month price increases since the market bottomed out at $395,000 in January, and it's the highest median sale price we've seen since last summer. Helping fuel this rally is the fact that mortgage rates have come back down a bit after their April spike, settling at 6.37% in May, which is 5.77% lower than the 6.76% we were seeing at this time last year. That said, the median monthly P&I payment came in at $2,201, which is only 2.57% lower than the $2,259 the median homeowner was paying a year ago. The affordability gap is narrowing, as rising prices are beginning to eat into the savings that lower rates have provided. It'll be worth keeping a close eye on this dynamic as we move deeper into the summer months.
Inventory is back to last year's levels just in time for the summer rush
After spending much of the winter and early spring playing catch-up, inventory levels have finally returned to where they were at this time last year. In May, there were 1,550,000 homes available for sale, representing a 0.65% year-over-year increase and a 3.33% month-over-month gain. While the year-over-year increase is modest, it's encouraging to see inventory keeping pace with last year's levels, especially considering how tight supply has been for the past several years. On the new listings front, 474,976 new listings hit the market in May, representing a 2.12% year-over-year increase, though this was a slight 0.45% decline from April's pace. This tells us that sellers are still actively listing their homes, but the initial spring rush may be tapering off just a bit. If inventory continues to build through June and July, buyers heading into the summer could find themselves with the most options they've had in years.
Buyers are back, and they're buying
Perhaps the most encouraging data point this month is the significant uptick in existing home sales. In May, 4,170,000 homes changed hands, representing a 3.22% increase on both a month-over-month and year-over-year basis. This is a meaningful shift from the sluggish sales figures we've been tracking over the past several months, and it suggests that the combination of lower mortgage rates and growing inventory is finally pulling buyers off the sidelines. It's also worth noting that this is the highest existing home sales figure we've seen since December, when the market saw its seasonal year-end push. If this momentum carries through the summer, we could be looking at one of the more active selling seasons we've seen in recent years. Of course, the big wildcard here is mortgage rates. If rates continue to decline, it could add even more fuel to the fire. But if they tick back up, as they did in April, it could pump the brakes on what has been a very promising start to the summer.
The tug-of-war between buyers and sellers continues
When determining whether a market is a buyers' market or a sellers' market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller's market, whereas markets with more than three months of MSI are considered buyers' markets.

Right now, the national market finds itself in an interesting position. Inventory is growing, but existing home sales are growing right along with it, which means the months of supply on the market hasn't shifted dramatically in either direction. The fact that both supply and demand are ticking up simultaneously tells us that we're in a relatively balanced market at the national level. However, the direction of mortgage rates over the next couple of months will likely determine which way the scale tips. If rates continue their downward trajectory, demand could outpace supply, pushing us back toward a seller's market. On the other hand, if rates climb again, inventory could pile up, giving buyers the upper hand. As always, real estate is a highly localized asset, which is why you should check out what's going on in your local market below in the Local Lowdown!

Big Story Data

The Local Lowdown
Quick Take:
  • Single-family home prices continue their meteoric rise, climbing more than 22% year-over-year to a median of $2.2 million.
  • Inventory levels have plummeted by more than 40% compared to last year, with fewer than 700 total homes available for sale.
  • Listings are selling in roughly two weeks or less, giving buyers almost no time to make decisions.
Note: You can find the charts/graphs for the Local Lowdown at the end of this section.

Single-family homes breach the $2.2 million mark for the first time
San Francisco's single-family home market continues to reach new heights, with the median sale price climbing 22.56% year-over-year to $2,200,000. This marks one of the strongest year-over-year gains we've seen in the market's recent history. The condo market posted more modest gains, with the median sale price increasing 3.17% to $1,332,500. Competition remains extraordinarily fierce, with single-family homes selling for nearly 25% over the original asking price on average, and condos selling for nearly 7% over asking. These premiums reflect the intense demand from buyers who are willing to pay top dollar to secure a home in San Francisco.

Inventory has been cut nearly in half compared to last year
The inventory shortage that has defined San Francisco's market throughout 2026 shows no signs of easing. There are currently just 216 single-family homes for sale in the city, representing a staggering 44.62% decline compared to May 2025. The condo market is facing a similar crunch, with inventory down 37.96% year-over-year to 469 units. Combined, there are fewer than 700 homes available for sale in all of San Francisco. The good news for sellers is that their properties are in high demand; the challenge for buyers is finding anything suitable to purchase in the first place.

Homes are flying off the market at a breakneck pace
With inventory at such critically low levels, listings are being snapped up almost immediately. The average single-family home is selling in just 12 days, representing a 7.69% decrease compared to last May. The condo market has seen an even more dramatic acceleration, with the average condo selling in just 16 days, a 38.46% year-over-year decline. For context, last May the average condo sat on the market for 26 days. This rapid pace continues to put buyers at a disadvantage, as there is virtually no time to weigh options before committing to an offer.
San Francisco remains one of the most competitive seller's markets in the state
When determining whether a market is a buyers' market or a sellers' market, we look to the Months of Supply Inventory (MSI) metric. The state of California has historically averaged around three months of MSI, so any area with at or around three months of MSI is considered a balanced market. Any market that has lower than three months of MSI is considered a seller's market, whereas markets with more than three months of MSI are considered buyers' markets.

With just 1.1 months of single-family home inventory and 2.3 months of condo inventory on the market, San Francisco remains a deeply entrenched seller's market across all property types. Both figures are down nearly 48% year-over-year, representing some of the most dramatic shifts we've seen in recent memory. The condo market, which was firmly in buyer's territory last May at 4.4 months of supply, has completely transformed into a strong seller's market. Until new inventory enters the market in meaningful quantities, sellers will continue to hold all the cards.

Local Lowdown Data

ActivePipe Message ID: 3892381

Recent Blog Posts

Stay up to date on the latest real estate trends.

Existing home sales posted their strongest year-over-year gain in quite some time, signaling that buyers are finally coming off the sidelines.
The spring selling season has delivered exactly the kind of price action that sellers were hoping for.

The spring rally is in full swing
New listings are flooding the market as sellers get off the sidelines
Inventory levels continue to climb, with new listings pouring onto the market as sellers look to capitalize on the busier spring months.
Median home sale prices bounced back in a big way in April, as the spring selling season kicked into gear with nearly a 1% year-over-year increase.
Median home sale prices ticked up ...
Inventory levels continue to climb modestly on a year-over-year basis, with new listings surging heading into the spring selling season.
Existing home sales rebounded slightly from January, but remain below where they were at this time last year.
View All

Let’s Talk

You’ve got questions and we can’t wait to answer them.

Contact Us
Get in Touch
Contact Details

Oggi Kashi

(415) 690-3792

[email protected]

 

CA DRE# 01844627

Headquarters

580 4th Street

San Francisco, CA 94107