Is San Francisco's Housing Market Hotter Than the 2021 Boom?

The Number That Actually Explains This Market

If you’ve been keeping up with local real estate news this year, you’ve probably heard some version of “San Francisco real estate is hot right now.” Fewer people have seen the number. 

Absorption rate measures how quickly inventory is being absorbed: listings currently under contract divided by the total inventory actively for sale. It’s a cleaner read on competition than price alone, because prices can be pushed up by a handful of outlier sales. Absorption rate looks at what’s happening across the market.

This July, San Francisco’s absorption rate came in at 65%. Earlier this summer, it hit 90%, a level the city never reached even during the pandemic buying frenzy of 2021, when the rate peaked at 65%. In other words, what we’re calling a more normal month right now matches the single tightest point of the last major boom.

At that 90% peak, for every 10 homes actively on the market, there were nine listings already in contract. That gives you a sense of just how little available inventory buyers were actually choosing from.

The Supply Side Matters, Too

What makes this more than a hot streak is that inventory itself is shrinking, not just getting absorbed faster.

Active single-family home listings fell 41% year-over-year to just 156.

And while the median sale price jumped 25.2% to $2.05 million, closed sales actually fell 11.7% year-over-year, to 173 transactions.

Fewer sales. Sharply higher prices.

That combination points to a market where well-positioned buyers are competing intensely for a very limited supply of homes. The listings buyers want often don’t remain available for long.

For sellers weighing whether to wait for a calmer moment to list, the absorption data is worth paying attention to. There isn’t a less competitive window visible in the numbers right now.

August 2026 Market Report

Erin Thompson leads one of San Francisco’s top-ranked real estate teams at Compass, specializing in San Francisco and Wine Country. Market data via Compass/MLS, through July 2026.