San Francisco Bay Area Luxury Home Market - Spring 2023

San Francisco Bay Area Luxury Home Market - Spring 2023

San Francisco Bay Area Luxury Home Market - Spring 2023

A Compass Report

This report will generally look at Bay Area home markets of $5 million+, or, depending on the analysis, at large, higher-price homes of 4000+ square feet. Generally speaking, luxury home sales soared from spring 2020, when the pandemic hit, through spring 2022 (the “pandemic boom”). Economic changes then caused the market to cool rapidly in the second half. In early 2023, buyer demand began to rebound and sales to climb again. On a year-over-year basis, sales are still running far below levels seen last spring at the peak of the pandemic boom, but somewhat higher than before the pandemic. Activity continues to accelerate as we get deeper into the spring selling season. 

In more affordable price segments, the number of new listings coming on market has generally dropped considerably since large interest rate increases began in early 2022 – this is mostly ascribed to the “mortgage lock-in effect” – but the number of new $5m+ listings in April 2023 was slightly higher year-over-year. Over 540 Bay Area $5m+ homes are now posted to MLS (plus others marketed off-MLS): About a 7 month supply of inventory at the current rate of sale. This substantially changes supply and demand dynamics, with buyers having a much greater choice of listings than in other price segments. For sellers, this means correct pricing is critical. 

Within the inner Bay Area, activity in the luxury market typically climbs rapidly through spring, slows in summer, spikes back up in fall (usually with a large surge of new listings in September), and then plunges for the mid-winter holidays. But counties with large second-home markets, such as Napa and Sonoma, can see activity peak in summer with gradual declines thereafter. What constitutes a “luxury” home is, of course, a matter of opinion, and factoring in the large differences in values by location, varies widely across the Bay Area. What one gets for however many millions of dollars in any specific city, town or neighborhood varies enormously, and in some locations, $5 million will purchase a huge, immaculate mansion on a 10+ acre estate; in others, a “fixer-upper.” In some Bay Area counties, the threshold for “luxury” home prices could easily be set at $3,000,000, or lower. In real estate, and especially in the market for very special, very expensive homes and estates, the devil is always in the details.

Statistics are very general indicators, and how they apply to any particular property is unknown without a specific comparative market analysis. Data from sources deemed reliable, but may contain errors and subject to revision. All numbers are approximate.


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