2025 Sunset R.E. Review

The median price for single-family homes in the Sunset District increased by 6.1% in 2025, while the number of sales rose by 2.3%. Despite three quarter-point reductions in the Federal Funds rate by the Federal Reserve, prices remained stable throughout the year.

The accompanying Sunset Home Sales Comparison table provides a quarterly breakdown of results in 2025 relative to prior years.

Data were sourced from the San Francisco Association of Realtors’ Multiple Listing Service, encompassing single-family home transactions within the Sunset, Parkside and Golden Gate Heights areas.

In 2025, there were 394 sales, representing an increase from 385 in 2024 and 344 in 2023; an annual growth of 2.3% and a 14.5% increase compared to 2023. The median sales price reached $1,655,000 in 2025, up 6.1% from 2024, which itself reflected a 3.9% increase over 2023. The average marketing period remained consistent at approximately 13-14 days across all three years, indicating sustained demand.

Analysis of the provided chart demonstrates incremental increases in median prices each quarter, reflecting a trend of steady appreciation. Mortgage rates remained between 6% and 6.75% throughout the year. Notably, despite being among the lowest transaction volumes recorded in the past 25 years, there is evidence of a positive trajectory in sales.

Major stock indices performed well in 2025, realizing gains of approximately 14-21%, though market volatility was present due to ongoing concerns about inflation and tariffs. The Consumer Confidence Index declined for the past five consecutive months, influenced by factors such as pricing, inflation, trade policy, political developments, interest rates and insurance costs. The unemployment rate in San Francisco has risen to 4.2%, which remains favorable relative to the historical average. The 30-year mortgage interest rate persisted in the 6-6.75% range, with potential for minor decreases in 2026. Inflation remains below the targeted 3% threshold.

Overall, economic conditions suggest a period of stability and uncertainty. Real estate typically lags broader economic trends by approximately 6-12 months, aligning with the observed performance metrics.

Although sales volumes are relatively low, property values have stabilized and exhibited moderate growth in 2025, signifying the establishment of a market floor. Sellers are adapting expectations accordingly, while many owners continue to defer listings until market conditions improve, contributing to limited inventory. Buyers are adjusting to the prevailing interest rate environment, making their purchasing decisions accordingly.

Demand within San Francisco and the Sunset District is expected to remain steady, supported by the area’s desirability and price stability. Ongoing monitoring of policies, such as the new Family Zoning plan, is advised, as proximity to larger buildings could affect property desirability due to increased density.

Looking ahead to 2026, the real estate market is projected to remain subdued. However, improvements over 2025 are anticipated. Market conditions are expected to be balanced between buyers and sellers, with inventory likely remaining constrained as owners opt to retain properties absent compelling reasons to sell.

Prospective buyers may find strategic opportunities in the current environment. For sellers, the market is slow yet showing signs of improvement; appropriately priced and marketed properties should perform well. Those considering portfolio adjustments may benefit from reduced competition amid ongoing investment market sluggishness.

I enjoyed my communications with many of you throughout the year. Best wishes for a successful and prosperous 2026!

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.