Why Do People Think Condos Don’t Appreciate?
Almost every week, I hear some version of this from buyers and people online: I don’t want a condo, they don’t appreciate.
I understand where it comes from. If you have watched the headlines since the start of the pandemic, you saw condo prices fall or stay flat. In some neighborhoods, you saw owners sell for less than they paid more than a decade earlier. Those were real, painful losses.
But that view rests on a small slice of the story. It focuses on the numbers and skips the factors behind them. Condos, like single family homes, co-ops, townhomes, and TICs, follow the same rules of basic economics. There were very specific reasons condos had a terrible four to five year run in San Francisco, and very specific reasons they have just had their largest annual jump in over a decade.
What Happened to San Francisco Condo Prices After 2019?
Why Condos Peaked Before the Pandemic
The San Francisco condo market generally peaked in 2019. Office vacancies were near historic lows, and most companies required employees in the office full time, so buyers needed to live close to the city’s commercial hubs.
People were also excited to be here: the walkability, the restaurants and bars, the events and nightlife, the cultural scene. With single family inventory limited and, on average, much more expensive, condos were a natural fit for a lot of buyers.
How the Pandemic Erased Condo Demand
Many of the factors driving condo demand disappeared almost overnight in 2020. Remote work took off, and people no longer needed to pay a premium to live near work in a small unit with no outdoor space. They could leave the city, spend less, and get more house, more land, a home office, and a home gym.
Quality of life in the city also declined. As foot traffic dropped, crime and homelessness rose and street conditions got noticeably worse. Restaurants closed, retail closed, and offices emptied out. The things that made San Francisco so desirable faded, and condo demand faded with them.
How Much Did San Francisco Condo Prices Fall?
In March 2020, the citywide average condo price was $1,151 per square foot. By March 2024, it was $1,017 per square foot, a drop of almost 12% over four years. Neighborhoods closer to downtown saw even bigger declines.
Owners were not just losing equity. They were still paying property taxes, homeowners insurance, HOA dues, and maintenance. And with demand so weak, condos were taking more than 50% longer to sell.
That stretch is where the myth comes from. Buyers saw a sustained period where condo owners lost money and concluded condos are bad investments. That conclusion ignores the reasons for the downturn, the years of appreciation that came before it, and the reversal happening right now.
Have San Francisco Condos Appreciated Historically?
Yes, and the long-term numbers make that clear. Look at 2012 to 2020. In January 2012, the median condo sale price in San Francisco was $619,000. By January 2020, it was over $1.2 million. Median prices roughly doubled in eight years.
Price per square foot tells the same story. The median was $593 per square foot in January 2012 and $1,141 per square foot in January 2020.
There is no blanket rule that condos do not appreciate. Like any other property type, or any other good, pricing follows supply and demand. When remote work took off and city conditions deteriorated, it made sense that housing demand and prices fell. The question is always what factors are at play in the market you are buying into.
Why Are San Francisco Condo Prices Rising in 2026?
The same forces that pushed condo prices down have now reversed, which is why condos are having their best year in over a decade.
Return to Office Is Bringing Buyers Back
San Francisco office vacancy peaked at around 37% in Q3 2024. Since then, the city has posted seven straight quarters of positive absorption, and vacancy is now around 29%. Demand from companies looking for office space has climbed to a record of nearly 9 million square feet, with AI companies driving a large share of it.
Companies spending heavily to build out and lease new space want people using it, so many are reversing remote work policies. According to Placer.ai, San Francisco now ranks second in the country for year-over-year growth in office visits. People taking new jobs increasingly need to live within a reasonable commute, and people who left during the pandemic are coming back. That alone increases housing demand in the city.
City Conditions Have Improved
Improved city conditions are making people more willing to buy instead of rent. Crime is at multi-decade lows. Tent encampments are at the lowest levels since the city began tracking the data roughly a decade ago. Tourism and convention traffic are near record highs.
That renewed foot traffic is bringing new retail and restaurants. Kidder Mathews research put the city’s retail vacancy rate at 5.6% in Q2 2026, down from 6.0% in Q1 and 6.5% a year earlier, the fourth straight period of improvement. Concerts, night markets, farmers markets, and cultural events are popping up across the city and making neighborhoods more enjoyable places to live.
How Much Have San Francisco Condo Prices Gone Up This Year?
Comparing 2026 year to date with the same period in 2025, the average condo price per square foot is up 13.4%. The average sale price is up 15.3%, and the median sale price is up 13.3%.
Supply tells the rest of the story. Months of supply, which measures available inventory against the current pace of sales, is down almost 39% to 1.9 months. If no new condos came to market, the city would sell through everything in under two months. The absorption rate, the share of condos finding buyers, is up 66% year over year.
New listings are up just 0.8% this year, while closed sales are up almost 15%. A shrinking inventory pool combined with rising buyer demand creates upward pressure on prices. That is basic supply and demand.
Will San Francisco Condo Prices Keep Rising?
No one can promise where prices go, but the leading indicators point to continued strength.
Inventory Is Running Below Recent Years
Weekly condo inventory in 2026 has run well below the levels of the past three years and has stayed flat or falling. If prices were headed down, you would expect inventory to spike above prior years. That is not happening.
Fewer Sellers Are Cutting Prices
As of the week ending September 11, 2026, 13% of condos on the market had cut their asking price, compared with 19% at the same point in 2025 and 24% in 2024. If the market expected depreciation, that share would be rising and running above prior years, not below them.
Pending Sales Are Holding Steady
Pending sales have tracked roughly in line with last year. A drop in pending sales would signal weakening demand and softer prices ahead, and the data does not show that.
Is Buying a Condo in San Francisco a Good Investment?
The myth that condos do not appreciate does not hold up. The condo market moves with supply and demand like any other. There was a several-year stretch where those forces worked against condos, and prices fell hard. But there have been many more years of appreciation, and 2026 has brought a lot of it.
That does not mean every condo is automatically a great investment. You have to run the numbers for the specific unit and building.
HOA Dues
Some San Francisco condos carry HOA dues of $2,000 to $5,000 per month. That is money you never get back. Those units can still be good investments, but the math has to work for your situation.
Special Assessments and Building Compliance
Factor in the risk of special assessments and major repairs required by San Francisco’s evolving regulations, including balcony inspection requirements, fire sprinkler rules, and seismic retrofits.
Building Size and Management
The calculus is different for a condo in a two-unit building than in a larger one, and different again for a small self-managed HOA than for a professionally managed doorman building with elevators. Many factors can tip the analysis one way or the other.
Quality of Life
Buying a home is not only an investment decision. You want to make money, or at least not lose it, but you are also buying a quality of life that does not show up on a spreadsheet.
Frequently Asked Questions About San Francisco Condo Appreciation
Do condos appreciate in San Francisco?
Yes. San Francisco condo prices roughly doubled from 2012 to 2020, fell almost 12% from 2020 to 2024, and in 2026 are up about 13.4% in average price per square foot compared with the same period in 2025.
Why did San Francisco condo prices drop after 2020?
Remote work removed the need to live near the office, buyers left for more space elsewhere, and city conditions declined. Citywide average condo price per square foot fell from $1,151 in March 2020 to $1,017 in March 2024.
Are San Francisco condo prices going up in 2026?
Yes. Through 2026, average price per square foot is up 13.4%, average sale price is up 15.3%, and median sale price is up 13.3% compared with the same period in 2025, the strongest annual gain in over a decade.
What is driving San Francisco condo demand now?
Return to office, led in large part by AI companies leasing new space, along with lower crime, fewer encampments, falling retail vacancy, and more activity across the city’s neighborhoods.
How much condo inventory is there in San Francisco right now?
Months of supply is about 1.9 in 2026, down almost 39% from last year. New listings are up less than 1% while closed sales are up almost 15%.
Will San Francisco condo prices keep going up?
Leading indicators point to continued strength. Weekly inventory is below the past three years, only 13% of listings had cut prices as of mid-September 2026 versus 19% in 2025 and 24% in 2024, and pending sales are steady.
What should I check before buying a condo in San Francisco?
Review HOA dues, reserves, and any planned or likely special assessments, the building’s compliance with balcony, sprinkler, and seismic requirements, and how building size and management will affect your costs and resale.
Is a condo or single family home a better investment in San Francisco?
Both follow supply and demand. Condos have a lower entry price but add HOA dues and building-level risks, so the right answer depends on the specific property, the building, and your plans.
Thinking About Buying a Condo in San Francisco?
I have lived in San Francisco for over 14 years, and before real estate I was a lawyer at one of the biggest law firms in the world. Condos are where that background matters most: HOA documents, reserve studies, assessment history, and building compliance issues are exactly the details that decide whether a unit is a smart buy.
I have helped people relocate here from across the country and move within the city. If you are weighing a condo purchase and want to understand what the city’s recovery and the AI boom mean for your decision, reach out. Whether you are ready to buy or just starting to research, I am happy to be a resource.
Austin Klar | Vanguard Properties | [email protected] | austinklar.com
