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San Francisco’s luxury real estate market gives home buyers access to unique properties in a world-class location, but at a steep price.
This guide offers some timely insights that will help you navigate the San Francisco luxury real estate market. It also covers some of the common mortgage strategies used in this market, including the jumbo loan.
This first part should come as no surprise. Luxury properties in San Francisco are positioned well above the city’s overall median home price.
Although the typical home price in San Francisco hovers around $1.3 million for standard properties, luxury homes generally start at around $3 million and can easily climb into the tens of millions.
For example, recent transactions have seen listings for high-end homes or condos reaching as high as $25 million.
This wide range reflects the diversity within the luxury segment. The San Francisco real estate market offers everything from upscale condos and renovated historic co-ops to expansive single-family estates in coveted neighborhoods.
The city of San Francisco offers a diverse portfolio of luxury properties tailored to different tastes and lifestyles. Here’s a summary of what you’ll find in this real estate market.
Condos make up a large part of the luxury real estate market in San Francisco, due to its urban density and other factors. They make up about two-thirds of the market, in terms of listings.
Often situated in high-rise buildings, condos offer panoramic views of the city skyline and the San Francisco Bay. In the luxury segment, bay views are a highly prized feature.
Some luxury condominium projects offer amenities you can’t get from a traditional single-family home or standalone condo unit. These include 24/7 concierge services, state-of-the-art fitness centers, pools, and private spas.
Each of these developments offers distinct features ranging from architectural design to amenities and location.
San Francisco property values tend to be highest in the following areas:
Pacific Heights is known for its grand mansions, historic architecture, and stunning views of the Golden Gate Bridge and San Francisco Bay. It’s a prestigious neighborhood that attracts affluent buyers and offers some of the most expensive real estate in the city.
Nob Hill is a prime location with luxury condos, historic buildings, and magnificent views of the city. It has a rich history and is known for being one of the most exclusive neighborhoods in San Francisco.
Sea Cliff is one of the wealthiest and most desirable neighborhoods in San Francisco, offering large homes with spectacular views of the Pacific Ocean and the Golden Gate Bridge. The area is home to some of the city’s most expensive estates.
Located next to the Presidio, this area is known for its spacious homes, tree-lined streets, and proximity to parks and recreational areas. It’s a quiet and affluent neighborhood with a strong sense of privacy.
The Marina District offers beautiful views of the bay, upscale dining, and boutique shopping. Homes here are often newer and feature modern amenities, with many offering views of the Golden Gate Bridge and the water.
SoMa, especially in the areas near Yerba Buena and the waterfront, has seen a surge in luxury real estate developments in recent years. With a mix of modern condos, penthouses, and lofts, this neighborhood has become a hotspot for tech professionals and wealthy buyers.
Luxury home buyers in San Francisco often have to rely on specialized mortgage financing products, due to the expensive nature of this market. Here are some common options:
A key characteristic of the San Francisco luxury market is that property prices far exceed the conforming loan limits set by government housing agencies.
Because of this, buyers often have to rely on jumbo loans in San Francisco to finance their luxury home purchases.
A jumbo loan is a residential mortgage that exceeds the conforming loan limits established annually by the Federal Housing Finance Agency (FHFA).
Securing a jumbo loan typically involves stricter criteria compared to conforming loans. Lenders typically want to see a higher credit score, often starting at 700 or above. A larger down payment is another common prerequisite for these “oversized” mortgage products.
Portfolio loans are offered by banks and credit unions, but they differ from the typical mortgages that get sold into the secondary mortgage market.
Instead, the bank or credit union keeps these loans on their books, which means they can be more flexible with their rules. Portfolio loans can be helpful for people with unusual financial situations, or for buying properties that don’t fit the usual mold.
This option allows luxury home buyers to qualify for a mortgage based on their assets—like savings, stocks, or retirement accounts—instead of just their income.
Asset-based loans can be a good option for self-employed people, retirees, or those with a lot of investments but maybe not a steady paycheck.
Borrowers typically need a down payment of 20% to 30% for these loans, and the interest rates can be higher than with traditional mortgages.
For luxury buyers in San Francisco who have a lot of wealth in investments, this can be a useful way to buy a home.
The San Francisco luxury real estate market has heated up over the past year or so, particularly in the segment of properties priced at $5 million and above.
Sales volume in this high-end sector has seen a significant increase, indicating strong demand.
Meanwhile, the inventory of San Francisco luxury homes remains tight, which puts upward pressure on home prices. Buyers planning to make a high-end home purchase in San Francisco should be prepared to act quickly and decisively when a desirable listing becomes available.
If you’re looking to buy in San Francisco, CA, we can help. At Sammamish Mortgage, we offer various mortgage options for you to choose from. Visit our website to get an instant rate quote or call us today to have your mortgage questions answered!
Whether you’re buying a home or ready to refinance, our professionals can help.
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No Obligation and transparency 24/7. Instantly compare live rates and costs from our network of lenders across the country. Real-time accurate rates and closing costs for a variety of loan programs custom to your specific situation.