Spring 2025 Market Update

Market Update: The Only Constant is Change

Greetings, readers! We trust this message finds you well and have a jam-packed newsletter this edition as well as many deals in motion. But first, some news here at the office. We recently bid a fond farewell to Payton as he accepted an executive role at the German real estate brokerage Engel & Volkers. Given where Payton is in his career (and given where he’s from in the world) we agreed that this was a perfect fit, and we wish him all the best in his new position. So The Payton + Binnings Team is now The Binnings Team!

We’ve taken this opportunity to do some refreshing and rebranding. For example, our newsletter is now called “The Edge” - because, as a savvy investor, you should always have an “edge”, and our website has relaunched under the BinningsTeam.com domain. Our team all remains intact and we recently welcomed Jennifer Balenbin as our new Director of Marketing and Operations. Lorelei Rallojay remains our Executive Assistant. We are excited about what the future holds and also have much to celebrate from our 15-year run with Payton. It was epic in every way and we remain close friends and colleagues.

Diving straight into market talk, the real estate market is off to its best start in the last couple of years. A sense of renewed vigor is in the air and activity is healthy. We are seeing bidding wars for many properties and buyer activity, which had been pent up due to shockingly fast rate hikes, is now loosening up as a new reality sets in. Using ourselves as a microcosmic example - during the week of March 3rd, Sejal and I put 5 homes into contract (see the Deals in Motion section below) and have a few more in the queue. Comparing notes with colleagues at our various broker roundtables, we are hearing that activity has picked up all around.

We’re proud to share with you some reports we created showing trends going back the past decade or so, and have linked them here. We hope you find the write-ups useful, as we’ll be publishing more of these in the future. 

Some key takeaways from our reports (linked below):

San Francisco Single Family Homes

• The market showed three distinct phases: steady appreciation (2014-2019, +50% growth), pandemic boom (2020-2021, reaching a median price of $1.8M at the peak), and post-pandemic adjustment (2022-2024, with prices rebounding to a median of $1.625M in 2024).
• Despite recent volatility, long-term growth remains impressive - the 2024 median price is 57% higher than 2014 levels, representing a compound annual growth rate of 4.6% over 11 years.
• Recovery indicators suggest a new market equilibrium - sales volume increased 14.7% from 2023, and the sale-to-list price ratio improved from 97.06% to 99.38% in 2024.

San Francisco Condominiums

• 2023 marked a historic inflection point - for the first time in a decade, San Francisco condominiums sold below asking price on average (99.21% sale-to-list ratio), with modest recovery to 100.23% in 2024 indicating stabilization.
• A "soft landing" appears to be occurring - unlike previous severe corrections in San Francisco's volatile market, current data shows measured adjustment with small price drops and modest extensions in market time.
• The market is establishing a "new normal" equilibrium at different levels than pre-pandemic - around 100% sale-to-list price ratio and 30-35 days on market, more balanced than the extreme seller's market of 2015-2019 but still relatively efficient.

Southern Marin Single Family Homes

• The market has experienced remarkable transformation with median prices rising from $1.4 million in 2014 to $2.23 million in 2024 (59% growth), despite a 4% decline from the 2022 peak.
• Market conditions have normalized from the pandemic frenzy - days on market increased from 22 days in 2022 to 33 days in 2024, and the sale-to-list price ratio returned to 96.7% (compared to over 104% during 2021-2022).
• Strong price resilience demonstrates Southern Marin's enduring appeal - even during market adjustments, values maintained most pandemic-era gains, with price per square foot still 57% higher than 2014 levels.

Where does the market head from here? According to our reports, many signs point to the market having bottomed in 2023, as 2024 showed the first signs of stabilization and recovery, and 2025 so far is off to a great start. There are threats looming, including the stock market's tariff tantrum, the wall of debt maturing and needing to be refinanced at higher rates, and volatile interactions with our trade partners and allies.

Our eyes are still firmly affixed to the 10-year bond yield, which we’ve been writing about going back many editions. Movement in the 10-year tends to be a leading indicator of where mortgage rates are headed. Thankfully the 10-year has pulled back in recent weeks, although it was flirting with 5% as recently as mid-January. The 5% level is key, and should it be meaningfully breached, it could throw a wet blanket on real estate activity. But for now, thrusters have been activated for the real estate market and local dashboard metrics are looking healthy. Also on close watch is inflation data, the upcoming FOMC meeting, and corporate earnings in the wake of tariffs.

Prediction: RTO (Return to Oxytocin)

You’ve probably heard the acronym RTO - Return To Office. Around the world, employer mandates are gradually rolling out, forcing employees back to the office - some full-time and others part time. Even Mayor Lurie has recently implemented a return-to-office policy for the City’s approximately 10,000 workers, taking effect on April 28. While hybrid work is here to stay, the 100% work-from-home trend is fading and we expect this trend to continue. We’re not here to assert whether we agree or disagree with this trend - that’s for the market to decide - but there are elements to this that we find interesting.

For example, many believe that magical things happen when people leave the house and get out. Serendipitous run-ins. Game-changing ideas that bubble up over coffee or lunch. And let’s not forget all the things happening around the infamous water cooler lol. Exchanges during in-person interactions catalyze neuromodulator cascades in the brain, such as the release of oxytocin. These neurochemicals are largely responsible for bonding us humans together on a deeply visceral level. In an increasingly tech-driven world where we are more connected yet more lonely than ever, we could reach a breaking point where humans desire to be with each other and work in close proximity again. Sounds crazy, right? Not to the people betting big on it.

In the dog eat dog world of capitalism, all it takes is a few companies returning to office (or as we just coined, “returning to oxytocin”) to set off a domino effect. The pendulum could swing back to a bustling downtown and financial district in time. Neighboring areas that have been hit hard from the pandemic would finally get their day in the sun - think SOMA, North Beach, Telegraph Hill, Rincon Hill, South Beach, and many more, as downtown makes a comeback. 

These are admittedly long cycles, but things are looking increasingly that we may have troughed.

That’s this edition's prediction, anyway. Hybrid work has many benefits, and once again, we’re not saying we like or dislike the RTO trend. Our commentary is strictly from a real estate markets standpoint.

Speaking of real estate markets - can you guess which neighborhood is the most under-recognized yet exciting area right now? Hayes Valley? Sorry, old news. It’s Dogpatch! In recent months there has been a flurry of activity in the area including:

Stephen Curry's Investments

• Thirty Ink relocating HQ to a 24,691-sq-ft, five-story building in Dogpatch
• New HQ will house Curry’s 8 businesses and 13 entities
• Includes ground-floor community and event space

Y Combinator

• Opened new 60,000-sq-ft headquarters at Pier 70 in January 2024
• Creating a campus-like community for startups and entrepreneurs

Sam Altman's Leasing at Mission Rock

• Altman’s crypto startup, World, negotiated a 70,000-sq-ft lease at Mission Rock Building B
• Part of Mission Rock’s mixed-use development

Retail Developments

• Blue Bottle Coffee and Sweetgreen signed 10-year leases at Mission Rock
• Arsicault Bakery opened third location at Mission Rock
• Other retail includes Ike’s Love & Sandwiches

Neighborhood Revitalization

• Pier 70 undergoing a $3.5B mixed-use transformation (offices, homes, retail, art studios)
• Esprit Park renovated, adding dog areas, picnic spaces, exercise stations

Dogpatch is attracting more tech startups due to Y Combinator's influence. Increased interest in residential and commercial real estate developments are benefiting as a result. And let’s not forget Chase Center and the Golden State Warriors… it’s just up the street. Go Dubs!

We hope you’ve enjoyed this edition. We are committed to providing our clients with superb service and a distinct edge in the marketplace, and of course always welcome your referrals. Thank you for reading and catch you next time.

The Binnings Team

Deals In Motion

• 166 Homestead Blvd, Mill Valley - $4,750,000 4 bed/4 bath, 3,595 sq.ft. Represented seller, secured all-cash buyer with 8-day close through strategic pre-market exposure.
• 1515 Union Street #PHS, San Francisco - $4,625,000 (list price) 3 bed/3 bath, 1,943 sq.ft. Union House penthouse. Represented buyer, secured a great deal with closing price to be posted soon.
• 95 6th Avenue, San Francisco - $2,375,000 3 bed/2 bath, 1,883 sq.ft. top-floor condo in Lake District. Won against 5 competing offers, originally listed for $1,999,000.
• 2155 46th Avenue, San Francisco - $2,365,000 3 bed/3 bath, 2,070 sq.ft. two-level home in Outer Parkside. Secured through preemptive offer strategy, listed for $1,995,000.
• 717 Kirkham Street, San Francisco - $1,920,000 3 bed/3.5 bath, 1,750 sq.ft. modern condo in Inner Sunset. Won against 1 competing offer.
• 875 Indiana Street #516, San Francisco - $1,770,000 2 bed/2.5 bath, 1,610 sq.ft. townhome in Dogpatch. Represented seller, secured all-cash buyer with 14-day close after first open house.
• 1650 Broadway, Unit 105, San Francisco - $1,070,000 1 bed/1.5 bath, 873 sq.ft. condo at The LuXe in Pacific Heights. Won against 1 competing offer, listed for $1,049,000.