2024 Richmond R.E. Review

The single-family home prices in the Richmond District stabilized and rose after two years of decline with median prices increasing by 5.9% and the number of sales by 17.8% in 2024. Prices were pretty stable throughout the year as the Feds kept the interest rates steady, except for two quarter-point decreases later in the year. The Richmond Home Sales Comparison table shows the results in 2024 as compared with prior years, broken up by quarters.

The data were gathered from the San Francisco Association of Realtors’ Multiple Listing Service and consist of single-family home sales in the Richmond, Lake, Presidio Heights, Jordan Park, Laurel Heights, Lone Mountain and Sea Cliff areas.

In 2024, there were 179 sales versus 152 for 2023 and 196 for 2022, a 17.8% increase from 2023 and a 10.2% decrease from 2022. The median sales price increased 5.9% to $2.15 million from 2023 to 2024, while it went down 11.7% from 2022 to 2023. The amount of marketing time to sell a home decreased to 13 days, or 35% shorter, indicating good demand for the Richmond.

If you analyze the attached chart, it shows prices went up the first three quarters and then dropped in the fourth quarter, somewhat coinciding with the change in mortgage rates, which dropped to about 6.25% before moving up to the 7% range at the end of the year. I would caution about coming to conclusions about quarterly trends as the number of sales are low and not statistically significant, meaning one or two sales can skew the numbers quite a bit. Since I started collecting data 25 years ago, this is the third-lowest number of sales in the Richmond District, except for 2009 with 135 sales, and last year at 152. We almost had nowhere to go but up.

In 2024, the major stock indexes did well, gaining about 14-33% at the writing of this article, with some turbulence toward the end of the year due to inflation and the Feds guidance that there might only be two small interest rate decreases in 2025. The consumer confidence index is holding steady. Our unemployment rate is hovering at 3% in San Francisco, which represents pretty much full employment. The 30-year mortgage interest rate has hovered in the 6-7% range and may come down a little more in 2025. Inflation is in the targeted 3% range.

The economy appears to be in a holding pattern waiting to see what happens during the next Trump administration. With Republicans in control, the economy tends to do well historically. But remember that real estate is a lagging economic indicator, meaning that it will follow the economy up, usually by about 6-12 months.

So, even though sales are still low, prices have stabilized and went up a little in 2024, perhaps signaling a bottom. Sellers are finally realizing that prices are lower and that interest rates really affect how buyers look at the market. Those who need to sell are making price adjustments and selling. However, many owners are making the decision to wait until the market gets better before putting properties on the market, thus limiting our listing inventory and sales. Buyers are getting accustomed to this interest rate range and making buying decisions based on it.

Locally, the demand in San Francisco and the Richmond District will continue to be OK. It is a desirable place to live, and prices have dropped which makes it more affordable. A somewhat unknown is how much the impending closure of the Upper Great Highway will have on prices in the Outer Richmond as that neighborhood will be more impacted as it will be harder to get in and out.

My prediction for 2025 is that we will continue to have a slow real estate market, but better than 2024. It will be a very balanced market between buyers and sellers. Inventory will still be pretty tight as owners who do not have to sell will continue to hold onto their properties until the market gets better.

Therefore, if you are contemplating buying into the real estate market, there will be opportunities. If you are planning on selling, keep in mind that the market is slow but improving, but if priced and marketed correctly, you should still get a pretty good price. If you want to reposition your real estate portfolio, this is an excellent time to do it and take advantage of less competition as the investment market is still very sluggish.

Wishing you all a happy new year and all the best in 2025!

John M. Lee is a broker with Compass specializing in the Richmond and Sunset districts. If you have any real estate questions, call him at 415-465-0505 or email johnlee@isellsf.com.