In light of recent housing market trends, how the Bay Area’s real estate performance compares with pre-pandemic levels? Despite a slight uptick in market activity, the data indicates that sales remain below those seen before the pandemic. For the first eight months of this year, major metropolitan areas in California, such as Los Angeles and San Francisco, reported that less than 2% of homes changed hands.
According to a report from Redfin, the San Francisco metro area had a residential turnover rate of 16.6 homes sold per thousand available properties (which includes single-family homes, condos, townhouses, and co-ops) during the same timeframe. In Oakland and San Jose, the rate was approximately 17 units sold per thousand—some of the lowest figures among the most populated metropolitan areas in the U.S.
Redfin’s analysis compared sales volumes to overall housing inventory, regardless of listing status, providing insight into housing supply. These turnover rates, referred to as “turnover rates,” are significantly lower than pre-pandemic figures; from January to August 2019, San Francisco and San Jose saw about 20 homes sold per thousand properties, while Oakland was around 25.
Following a steady decline over several years, the turnover rate spiked in 2021 due to record-low mortgage rates, which spurred a surge in home sales. However, with mortgage rates climbing again, 2023 has seen all three metropolitan areas reach their lowest turnover rates in at least a decade.
Interestingly, condos and townhouses typically sell at higher rates than single-family homes, though all categories have seen sharp declines over the past five years. In the San Francisco metro area, sales of single-family homes dropped from approximately 17 in 2019 to 15 in 2024, while condos and townhouses fell from 28 to 19.
When compared to national averages, the decline in the Bay Area’s housing sales rate between 2019 and 2024 has been relatively modest. In fact, Redfin’s data shows that the Bay Area is the only one of the fifty largest metropolitan areas in the U.S. to experience a slight increase in sales rates over the past year. According to Chen Zhao, Redfin’s Chief Economist, this could relate to the Bay Area’s sharp sales market downturn in late 2022 and 2023, which has begun to recover slightly as mortgage rates ease.
However, the Bay Area still ranks among the lowest in turnover rates across the U.S., similar to Los Angeles, Anaheim, and San Diego. For the first eight months of this year, the average sales rate in the largest U.S. metropolitan areas was 25 homes sold per thousand, well above the figures reported in California’s major markets.
Zhao attributes California’s low turnover rates largely to the housing affordability crisis, alongside other factors, such as California’s Proposition 13, which ties property tax assessments to the price at which homeowners purchased their properties, incentivizing them to hold onto their homes rather than selling.
He emphasizes that if mortgage rates continue to decline, the Bay Area could see more residential transactions take place. However, there is no certainty that mortgage rates will ease; they tend to be more volatile compared to the Federal Reserve’s rates. Just in October, the average mortgage rate for a 30-year loan rose from 6.08% to 6.32%, reversing the downward trend observed in September.
