Downtown San Francisco is seeing home prices rebound

After years of declining property values, shuttered storefronts and a pandemic-driven exodus of remote tech workers, signs of life are reemerging in San Francisco’s core.

Median home list prices in one central ZIP code — encompassing neighborhoods like Nob Hill, Union Square and the Tenderloin — soared 51% in May compared to the same time last year, according to Realtor.com.

While those figures reflect list prices rather than final sale prices — and can swing based on the mix of homes entering the market — the sharp uptick points to renewed buyer interest in an area that, until recently, symbolized San Francisco’s struggles.

The shift comes not only as more workers return to their offices, but also as newly elected Mayor Daniel Lurie pushes a cleanup campaign aimed at reversing the city’s declining reputation.

Since taking office in January, Lurie has focused on curbing open-air drug markets, reducing homelessness and boosting sanitation, while proposing a budget centered on core services like public safety.

“The people of this city have called on us to rebuild a safer, cleaner, thriving San Francisco,” Lurie said last month. “To do that, we must provide clean and safe streets, address the crisis of homelessness and addiction, and reinvigorate the spirit and strength of businesses and neighborhoods across this city.”

Lurie, a political newcomer and heir to the Levi Strauss fortune, defeated incumbent Mayor London Breed in a campaign dominated by concerns over quality-of-life issues.

His proposed $800 million budget includes controversial cuts to city staffing — roughly 1,400 positions — while expanding law enforcement and behavioral health initiatives.

Among the measures already underway: targeted enforcement in drug hotspots and new rules requiring city-distributed drug paraphernalia to be paired with counseling referrals.

Though some critics have protested the staffing cuts, Lurie’s office touts early progress. Crime is down nearly 30%, car break-ins are at their lowest point in 22 years and street encampments have dropped to their lowest level since 2019, according to city data.

“We’re definitely starting to see progress,” Steven Huang, founder of Ascend Real Estate and president of the San Francisco Association of Realtors, told Realtor.com. “Some of it is visible today, and I would say that even in Downtown, in Union Square, our famous shopping district, you’re definitely going to see a lot more foot traffic already, but it’s just the beginning.”

The housing recovery remains uneven. In the broader San Francisco metro, the median home list price stood at $998,000 in May — still 4% lower than a year earlier. Most ZIP codes across the city continue to lag behind pre-pandemic pricing levels.

The collapse began in earnest in 2022, when San Francisco home prices tumbled 12% over a nine-month stretch, according to the Case-Shiller Home Price Index.

The hollowing out of downtown — fueled by work-from-home shifts, office vacancies and the fentanyl crisis — left once-busy corridors eerily quiet.

“Demand for homes in central San Francisco fell as office workers went remote and even relocated,” said Hannah Jones, senior economic research analyst at Realtor.com.

“However, compared to last year, prices are on the rise again, suggesting demand for homes in the city is on the rise once again, perhaps prompted by return-to-office requirements.”

Whether the current momentum can be sustained remains to be seen. The market is still navigating high interest rates, affordability challenges, and persistent concerns about public safety. But with AI companies clustering in the Bay Area and downtown’s cleanup underway, some see the beginnings of a fragile rebound.