Connect with a top agent to find your dream home

Get started

Dreamscapes and Cityscapes: A Realistic Guide to Buy a House in San Francisco

At HomeLight, our vision is a world where every real estate transaction is simple, certain, and satisfying. Therefore, we promote strict editorial integrity in each of our posts.

From rolling hills to bay views to skyscrapers, it’s no wonder that San Francisco has become a popular destination for people seeking a city that has it all — from families to young professionals to sun-seekers, and, no doubt, techies.

Of course, having it all doesn’t come cheap. If you’re looking to buy a home in San Francisco, according to an October 2019 Bay Area Market Report, you should be prepared to spend about $1.57 million for a median-priced home.

Don’t let that number scare you — you’ve come to just the right place. We’ve talked to experts in San Francisco real estate, scoured its 30-plus neighborhoods, and evaluated exactly what it takes to own one of those gorgeous (and highly coveted) Victorian homes in the Golden City.

In this comprehensive guide, you’ll learn everything from where and when to shop for houses for sale in San Francisco, what to do about earthquake insurance (if anything), and how to navigate a real estate market for a city that seems to have no cap.

Compete like you're an all-cash buyer

HomeLight Cash Offer™ makes an all-cash offer on your behalf

Make sure you’re ready to buy in the Bay

Feeling like you’re ready to buy doesn’t necessarily mean you’re ready. A home is a huge investment, and in San Francisco, we do mean huge. Before you start scouring the internet for houses for sale in San Francisco, make sure you’ve explored and compared all of your options.

So, how do you know if you’re really ready to break into the San Fran housing market? Ask yourself these questions:

  • How long do you plan to stay in this home, and what will your life look like during that time frame? This will not only help you to determine whether you’re better off renting, but also if you need to be in a specific school district.
  • What are your top priorities for a home, and what are you willing to give up? In San Francisco, sometimes you may have to sacrifice a parking spot for a highly sought-after bay view. 
  • How long of a commute are you comfortable with every day? Do you plan to drive, walk, or will you take public transportation?
  • Is location more important to you than certain home amenities?
  • How much can you afford to spend on a home? What will your mortgage look like? What kind of down payment do you have?

Today, nearly two-thirds of households in San Francisco are occupied by renters, so as a homebuyer, you’ll be in the minority. Even some of the city’s highest earners are still opting to rent due to a wider range of available places to live in the center of the city.

With high-paying tech and professional jobs increasing by 56% from 2010 through 2018, it comes as no surprise that construction of new apartment complexes targeting upscale renters has outpaced family homes.

A cityscape in San Francisco
Source: (Eduardo Santos / Unsplash)

Time your buy

As the saying goes, “There’s no time like the present,” and that’s especially true when it comes to buying a home in San Francisco. As one of the most expensive cities in the U.S., there’s common speculation that this Bay Area city will reach its housing peak — but that may not be true.

According to Joe Gillach, co-founder of Progressive Property Group, which offers property management, leasing, and relocation services in the area, “San Francisco, like all, has its ups and downs, but we have much fewer downs than ups.

“There is an old phrase: ‘trees don’t grow to the moon.’ There are some natural limits that all markets reach, but in some 30 years in San Francisco, that has yet to be true.”

So, if you’re trying to buy in this area, there’s no point in waiting for prices to go down — but there is something to be said for what time of year you purchase.

Andrea Swetland, an agent with over 26 years of experience in the Bay Area, explains: “Our busiest inventory time is March, April, and May.”

However, don’t be misled: that doesn’t necessarily mean these are the best months for buyers.

“A good time to buy is actually over the holidays because if people have not been able to sell their property, things may be more negotiable.”

In addition to getting your timing right, understanding the city’s current culture and economy is key.

With its progressive politics, innovative arts scene, and ahead-of-its-time technology, it’s no surprise that San Francisco’s contemporary culture is one of its main appeals. Yet even as one of the biggest metros in the country, San Francisco manages to maintain a town-like population with a reported 883,305 residents in 2018.

“As long as San Francisco remains the center of the tech world, there will always be jobs and wealth creation here and it will continue to be a vibrant city — great restaurants, great theaters, a huge cultural influence from Asia,” says Gillach.

Get to know the neighborhoods

When affordability is key, your best bet is to look towards the outer boroughs.

”Western neighborhoods, outer Richmond, outer Sunset, neighborhoods closest to the ocean — these are some of the last ‘affordable’ neighborhoods in the city,” Gillach explains.

For buyers with families, Swetland agrees that the Sunset can be a very attractive option. “Parks and schools. That’s a big reason why a lot of people like the Sunset,” she says.

Not only that, but the Sunset offers more space, parking, and public transportation access — and there are more available homes on the market for buyers. “You have a lot of families, even now, who have been there for 20, 25, 30 years, so as they start to downsize, we see a lot of those homes go on the market,” says Swetland.

In addition to going west toward the Pacific, neighborhoods in southeastern San Francisco such as Bayview and Hunters Point (also referred to as District 10) are rising in popularity, particularly among young people.

“A lot of young professionals are looking more in District 10, especially if they are younger people without kids, because they’re more willing to go into an up-and-coming area, and hope that by the time they want to sell or have kids, they can trade up,” explains Swetland.

Still curious whether living in the outer boroughs is right for you? Here’s a quick wrap-up of positives and negatives:

  • Pros: affordability; parking; larger single-family homes; little fog; good schools; easy commute south to Silicon Valley, San Jose, and the airport; close proximity to the ocean; up-and-coming family-oriented neighborhoods; modern homes and high rises; views of the Golden Gate and/or ocean; sense of community
  • Cons: further from downtown; longer commutes north; quiet neighborhoods; city feel; walking distance to shopping and restaurants can be extensive; lack of nightlife
The renowned Painted Ladies in San Francisco
Source: (Aaron Kato / Unsplash)

Types of homes in San Francisco

San Francisco’s Victorian and Edwardian homes are quintessential to the city. That’s why it’s no surprise that nearly half of the city’s 390,379 housing units were built before 1940.

Today, these older homes are most commonly found in the city’s most sought-after neighborhoods: downtown, SOMA (aka “South of Market”), and the Mission — areas flooded with young home renters.

While there may be slim pickings for Victorian homes on the San Francisco real estate market, there are a number of other classic California styles out there spread out across the city:

  • “Italianate” homes: a hybrid style of farmhouse-meets-Italian-countryside that was sparked by early settlers who arrived after the Gold Rush. Adorned with brackets across the rooflines and hooded windows and doors, many of these structures were destroyed after the 1906 earthquake, but those still standing are located west of Divisadero (Eureka Valley, Noe Valley, Dolores Heights) and the Mission.
  • “Stick” homes: homes built from redwood from the city’s neighboring redwood forest, located in Noe and Eureka Valleys, the Mission, and Potrero Hill
  • “Mission” homes: think of these as revamped “Spanish Colonial” homes, inspired by the look of Spanish missions spread throughout the state. You’ll find these homes in Glen Park, the Sunset, the Richmond, Noe Valley, and the outer Mission.
  • “Art Deco” homes: sharp-edged, sleek architecture with geometric features, most Art Deco San Francisco homes can be found in the ritziest neighborhoods of the city, such as Pacific Heights, the Marine, and Sea Cliff.
  • “Early Suburban Tract” homes: once the population began to surge, the city streamlined its housing output, adorning neighborhoods with suburban homes with similar floorplans; found in the Marina, the Sunset, the Richmond, Excelsior, Visitation Valley, Hunters Point, Bernal Heights, Noe Valley, Potrero Hill, and Glen Park.

Some of these older structures (cue: the Painted Ladies) are an emblem of the Golden City, embedded in its DNA, but they often come with their own set of problems.

“Dry rot is normal because they are older buildings,” explains Swetland. “It’s not uncommon that you’re going to see this stuff; you just have to figure out how comfortable you are with it, but it shouldn’t scare people away.”

The solution? According to Swetland, “The pest inspection is where they talk about dry rot and any condition that could affect the structure of a home.” She asks buyers to look at pest inspections from multiple homes even if they aren’t going to be looking at them, just to get familiar with those inspection reports and what they include.

The faults in San Francisco

There’s good news and bad news. The good news? You don’t have to worry about hurricanes or tornadoes in San Francisco. The bad news? Instead, you’ll have to switch your focus to earthquakes.

There are seven major faults in California, and of these seven the most significant are the San Andreas Fault, which cuts directly across the peninsula, and the Hayward Fault, which covers the East Bay. In 2014, the United States Geological Survey (USGS) warned that there is a 72% chance an earthquake of at least 6.7 magnitude will strike California in the next 30 years.

However, even such drastic statistics don’t seem to worry Californians enough to actually invest in earthquake insurance. In fact, across the entire state, only 13% of California homes actually have ’quake insurance. However, their laidback “Cali” attitude is likely not to blame here — quake insurance is expensive, with high premiums and deductibles.

Here are a few tips from Swetland when it comes to quake insurance:

  1. Review the JCP report (the natural hazards and geologic report for the address).
  2. Understand the home’s foundation and what type of rock it sits on.
  3. Is there any liquefaction?
  4. What material is the home? (Many homes are still made of brick, which is not very durable during an earthquake.)

Talk to a local real estate professional

There’s only so much you can read online, and if you’re serious about moving to the Golden City, your best bet is to get in touch with someone who knows the lay of the land. As one of the most competitive markets out there today, it’s important to find a real estate professional that you trust.

A top buyer’s agent in San Francisco helps clients purchase 1.8 times more homes than an average agent, and a top agent also saves those buyers a whopping average of $103,346. Before you find your dream home in the Bay, make sure you’re working with people who can help you close the deal.

Header image source: (Braden Collum / Unsplash)