December 2024: Real Estate Trends in the SF Bay Area from San Mateo's Top Realtors
- Kevin Peterson
- Jan 16
- 9 min read
Who is KPeterson.realty and how can we help you?
The Data-Driven Realtor: With 40+ years of combined experience in global sales and management consulting, we offer advanced analytics and a unique scattergram analysis to provide unparalleled insights into your home's value and the local market. Each decision is supported by data, ensuring accuracy and confidence in your real estate journey.
Renovation Guidance: Planning renovations? We offer expert guidance on enhancements to optimize your return on investment. Our clients can also benefit from our reliable network of designers and contractors, with whom we have completed over 30 projects. Furthermore, we offer comprehensive project management for any home renovation project.
Exclusive Off-Market Opportunities: We go beyond the MLS by uncovering hidden gems. Each week, we personally connect with homeowners and leverage our network to find off-market properties tailored to your needs.
Financial Expertise: With 20+ years of experience in investing, lending, and tax strategies, we help clients navigate financing options, preserve wealth, and secure favorable terms.
KPeterson.realty Complimentary Listing Services
Luxury staging | Cleaning | Inspection: All provided at no cost to you!
Renovation & ROI Management: Maximize value with in-house contractors and project management
Financial & Tax Strategies: Expert advice on finance, diversification & wealth preservation
Pre-Market Agent Engagement: Early exposure to maximize visibility
Targeted Campaigns: Door knocking & postcards to drive significant open house traffic
Buzz-Worthy Open Houses: Captivating events, 7 days a week
Follow-Ups: Personal outreach to all visitors & agents
Digital Marketing: Paid & organic advertising to reach more buyers
Scattergram Pricing Analysis: Proprietary, data-driven strategy
SF Bay Area Real Estate Trends - Help Us Spread The Word
If you believe our services or SF Bay Area real estate trends newsletter could be useful to someone you know, please pass along and let us know. We've got some KP swag that's cooler than a penguin in a snowstorm for you as a thank you!
Executive Summary: Five SF Bay Area Counties Proprietary Market Analysis
December is traditionally a slower time for the housing market. Here’s why:
Fewer homes are listed for sale because of the holidays.
Buyers and sellers often wait until January to make moves.
Homes that are on the market may take a bit longer to sell.
Prices tend to dip slightly but remain stable overall.
Outlook for January 2025: Buyers can anticipate greater negotiating leverage, particularly for townhouses and condos, as sellers have been holding off on selling since the holiday season. Investors should keep an eye on these trends, concentrating on properties with price changes and longer market durations for potential value opportunities.
Key Takeaways by County
County | Median Home Price | MoM Change | YoY Change | Average DOM | Inventory Change (MoM) |
San Mateo | $1.84M | -2% | +6% | 35 days | -18% |
San Francisco | $1.55M | Flat | +4% | 40 days | Lower than last year |
Santa Clara | $1.9M | +1% | +6% | 38 days | Stable |
Contra Costa | $925K | -3% | +5% | 42 days | - |
Alameda | $1.1M | -1% | +7% | 40 days | -15% |
Key Insights by Price Ranges
Price Range | Average DOM | % of Homes Sold Over Asking | Notable County Insights |
$800K - $1.3M | 40 days | 60% | Contra Costa and Alameda counties dominate this range with the most sales activity. |
$1.3M - $1.8M | 37 days | 70% | Strong competition in Alameda and Santa Clara counties. |
$1.8M - $2.3M | 35 days | 80% | San Mateo County leads, with high demand for larger family homes. |
$2.3M - $2.8M | 33 days | 85% | San Francisco and Santa Clara counties show robust activity in this range. |
$2.8M and above | 50 days | 40% | Luxury market slows down, but high-end homes in San Mateo still see steady interest. |
Table of Contents:
SF Bay Area Home Price Trends
KPeterson.realty Proprietary Heat Maps
Track how prices are trending month-over-month and year-over-year.
Pricing Month-over-Month (November to December)
Home prices dropped slightly across the region. December is a slower time for real estate, so this is normal.
Example: In San Mateo County, the median home price dipped by 2% compared to November.
Pricing Year-over-Year (December 2023 to December 2024)
Prices in most counties rose modestly, around 5% to 8%, showing that homes are still getting more expensive over time.
For instance, in Santa Clara County, the median sales price climbed 6% compared to December last year.
List-to-Sale Price Ratio
Homes are selling for less above the asking price than earlier in the year. In December, homes were sold for about 101% of the asking price on average (down from 104% in the Spring).
This ratio is also lower compared to December 2023 when it was around 103%.
The charts below are month-over-month (and now year-over-year) heat maps of pricing in the SF Bay Area. They are grouped by county and property type (Condo, Single Family Home, Townhouse). The metrics are Price Per Square Foot, Days On Market, how many sold, and the List To Sales Price Ratio.
Green highlighted cells indicate items keeping prices up in comparison to previous month's metrics.
Red highlighted cells indicate the opposite, i.e downward pressure on sales price which favor buyers more.
Enlarge each county Heat Map by clicking on each of the images.
20-Year vs. 10-Year Appreciation
Typically, single-family home prices in the SF Bay Area have doubled every decade since the 1980s. Given the robust SF Bay Area economy, we expect these values to stay elevated, particularly as inventory levels remain close to historic lows and geographical limitations restrict the construction of additional homes.
However, condos sales prices have been increasing less over the last few years as most home owners are wanting more space and less fees.
SF Bay Area Inventory Metrics
Active Listings
The overall number of homes available on the market. An increased inventory combined with a slower selling rate typically benefits buyers, whereas decreased inventory and a faster selling rate usually benefit sellers.
Month-over-Month Inventory Levels
Inventory (homes for sale) dropped by about 20% compared to November. This happens every year as fewer people list homes during the holidays.
Year-over-Year Inventory Levels
Inventory levels were down about 10% compared to December 2023, showing that fewer homes are available for buyers overall.
20-Year vs. 10-Year Inventory Levels
Every year we see active and sold inventory go up then down, a predictable cadence. How high or low is dependent on the next metric, Months of Inventory or the rate of change in inventory being sold.
We are above historically low inventory levels; active inventory is now exceeding 2023 levels.
The graphs below show both a 20-year and 10-year time horizon for both single family homes and condos that are on the market (active) versus sold.
Months of Supply
The time it would take to sell all active listings at the current sales rate.
20-Year vs. 10-Year Months of Supply
This metric tells us how hot the markets are currently, i.e. the rate of change. If no new listings were added, this metric tells us how long it would take to sell all the remaining active homes. In the last 10 years, we have been in a Seller's Market except for condos in the year of 2020, when the COVID Pandemic hit.
Buyer's Market = Over 6 months of supply
Seller's Market = Under 3 months of supply
Demand Indicators
% Over Asking vs. DOM (12-Month Look Back)
Days On Market measures how long it takes for homes to sell.
Buyers: Longer DOM gives more room for negotiation.
Sellers: Shorter DOM indicates strong interest.
Homes are taking slightly longer to sell in December compared to November. Across the region, the average time for a home to sell is about 35 to 40 days, which is 5 days longer than last month.
Compared to last year, homes are selling at about the same pace.
How much over asking a home sold for and how fast it was sold, i.e. Days On Market are the next two Key Performance Indicators (KPIs). These show how much demand there is for SF Bay Area single family homes and condos.
Sales price to list price peaked in April 2024 for single family homes and condos while days on market bottomed in May at 16 days.
Pending Sales
Homes under contract can show how quickly the market is moving.
The graphics below display the pending sales for all five counties, categorized by home types and price levels. The price tiers with the highest volume of pending sales for each home type and county are highlighted in yellow. For example, in Alameda County, the most condos are sold at prices below $800K, while single-family homes and townhouses are sold between $800K to $1.3M. The color coding or heat map indicates changes compared to the previous month, with positive impacts on sales prices highlighted in green and negative impacts highlighted in red.
Macroeconomics
Mortgage Rates
Month-over-Month Change
Rates rose from around 6.60%-6.70% (Nov 2024) to 6.85% (Dec 2024), showing a modest upward trend.
Driving Factors: The increase can be attributed to rising bond yields and expectations that the Federal Reserve would keep rates higher for longer, given continued economic resilience and inflation concerns.
Year-over-Year Change
Rates increased from 6.61% (Dec 2023) to 6.85% (Dec 2024), indicating a 0.24% increase.
10-Year Treasury
Yield Increase: The 10-year Treasury yield rose from approximately 4.20% at the beginning of December to around 4.40% by mid-month, continuing its upward trajectory into January 2025. YCharts
Market Dynamics: This rise was part of a broader sell-off in global government debt markets, with yields on 10-year benchmark notes increasing across the board, except for Australia. Seeking Alpha
Economic Indicators: The increase in yields was influenced by strong economic data, including a robust December jobs report showing an addition of 256,000 jobs, which reinforced expectations that interest rates would remain higher for longer. Reuters
Investor Sentiment: Concerns about potential inflationary pressures from anticipated fiscal policies and the Federal Reserve's stance on interest rates contributed to the upward movement in yields. MarketWatch
Stock Market (Performance for 2024)
S&P 500 Performance: The S&P 500 achieved a gain of over 20% for the second consecutive year—the first occurrence since 1998–99. This performance was driven by economic strength, easing monetary policy, and robust corporate earnings. Dimensional
Nasdaq Composite: The tech-heavy Nasdaq Composite surged by 28.6%, closing the year at 19,310.79. Notably, it surpassed the 20,000 milestone on December 11, 2024. Wikipedia
Market Drivers: The rally was fueled by advancements in artificial intelligence (AI) and strong performances from major technology companies, often referred to as the "Magnificent 7." These tech giants significantly contributed to the market's upward trajectory. theaustralian
Federal Reserve Policy: The Federal Reserve's decision to cut interest rates by 1% to an upper bound of 4.5% provided additional support to the equity markets, enhancing investor confidence. Bloomberg
Investor Sentiment: Positive economic indicators and expectations of favorable fiscal policies under the incoming administration further bolstered market optimism, leading to increased investment inflows.
FED (Federal Reserve)
Interest Rate Reduction: On December 18, the Federal Open Market Committee (FOMC) reduced the federal funds target range by 0.25 percentage points, setting it at 4.25% to 4.5%. This marked the third consecutive rate cut in 2024, following reductions in September and November. CBS News
Economic Projections: The FOMC released updated economic projections, indicating expectations for a slower pace of rate cuts in 2025 due to persistent inflation and potential fiscal policies under the incoming administration. The median estimate suggested only two rate cuts in 2025, a revision from the four cuts projected in September.
Balance Sheet Developments: The Federal Reserve continued its balance sheet reduction strategy, allowing holdings of Treasury securities and agency mortgage-backed securities to mature without reinvestment, as part of its ongoing efforts to normalize monetary policy.
Inflation
In December 2024, U.S. inflation remained above the Federal Reserve's 2% target, with the annual inflation rate at 2.7% for the 12 months ending in November 2024. US Inflation Calculator
The Consumer Price Index (CPI) data for December 2024 increased by 0.4% from the previous month, suggesting that while overall inflation is experiencing upward pressure due to energy prices, underlying inflation trends remain relatively subdued.
The FED is expected to proceed cautiously, considering potential inflationary risks from factors such as energy prices and anticipated economic policies. WSJ
Employment
Strong US Labor Market: The stronger-than-expected job growth and declining unemployment rate suggest a robust labor market, which may influence the Federal Reserve's monetary policy decisions. Investors have adjusted their expectations, now anticipating that the Fed may delay interest rate cuts previously expected in mid-2025. Financial Times
AI Talent Demand: The Bay Area continues to lead in artificial intelligence (AI) talent, housing approximately 61,497 AI professionals, the largest concentration in the U.S. This demand has driven tech wages in the region to be 17% higher than the national average, with software developers at tech companies seeing a 12% year-over-year wage increase. The tech job market on the whole has transformed from a growth-driven to a revenue-focused industry. Individuals previously finding opportunities through recruitment and referrals now face challenges in securing positions. CBRE
Shift in Job Postings: Since February 2020, postings for software development jobs have declined by over 30%, with significant layoffs continuing into 2024. Companies have shifted their strategies by cutting non-revenue projects and focusing on essential roles such as AI, while entry-level positions have diminished. WSJ
Office Space Dynamics: Despite the AI boom, office vacancy rates in San Francisco have reached historic highs, with more than a third of office spaces unoccupied. Some Bay Area tech companies are enforcing stricter in-office requirements, others maintain hybrid or flexible work models, reflecting a spectrum of strategies to balance business objectives with employee preferences in the evolving work landscape. There has been a decline in the number of individuals working exclusively from home since 2021, indicating a shift towards hybrid models.
To subscribe:
Comments