is arguably the most desirable neighborhood in San Francisco. The community is a high-end real estate market boasting some of the most luxurious properties in the city. You can find a mixture of residences — among the most beautiful homes are Victorian, Edwardian, and Mediterranean-style mansions. A posh residential enclave with elegant properties, Pacific Heights also enjoys proximity to downtown San Francisco; residents enjoy stunning views of the San Francisco Bay and the Golden Gate Bridge. Pacific Heights is an easy choice for those seeking luxury residential properties in the Bay Area.
The Pacific Heights housing market has seen several significant changes in recent years. Read on to discover how the local real estate market could shape up in 2023.
Rising home values: A sign of a booming housing market
Despite lingering uncertainty in the national economy, the Pacific Heights housing market has seen steady activity in recent years. The median home price for single-family houses comfortably exceeds $1 million, with some estimates putting the figure closer to $10 million
as of April 2023.
The neighborhood occupies just under one square mile in a priceless location central to San Francisco. As of June 2023, expert local agent Victoria Stewart had access to 76 publicly listed properties
in Pacific Heights. Most are more than a block from Fillmore St., the neighborhood’s musical nexus. The dozen properties at the top of the local market are listed for $10 million and more. Limited inventory due to the scarcity of new constructions has further fueled the rise in Pacific Heights home values.
Interest rates are on the rise
The Federal Reserve has expressed uncertainty about raising interest rates
for the 11th consecutive time, as they expect the economy to improve. Judging by ongoing trends, if the rates rise, the hikes are unlikely to be steep, and it's doubtful that the wealthy individuals interested in the Pacific Heights housing market would be impacted.
Favorable investing indicators for landlords
Although most of the housing units in Pacific Heights are owner-occupied, the demand for rental units is still high. About one-third of the population lives in rental units, making them a viable investment. The Pacific Heights rental market remains strong thanks to its high-end condominiums and townhouses, excellent amenities, rising population, and low vacancy rates. A limited supply of housing units has also kept the rental rates high (the median rent in Pacific Heights is more than double the national average).
There will be a positive net population migration
The Pacific Heights housing market is a magnet for the wealthy and well-educated — motivated buyers drawn to the area’s charm, infrastructure, and high-end amenities, including luxury shopping and fine dining. The renovation of San Francisco's financial district, about three miles away, into a world-class shopping, restaurant, and hotel destination has also brought an influx of new investment and job opportunities to Pacific Heights. Most investors and affluent professionals prefer to live in upscale communities such as Pacific Heights, further propelling population migration. Pacific Heights's population
now stands at about 20,143, and newcomers are expected to continue to trickle into this area. Such growth will likely drive high demand for housing and cause home values to appreciate.
San Francisco County real estate market trends in 2023
San Francisco’s status as a lucrative real estate market is founded on its many well-appointed neighborhoods. Pacific Heights is just one of the city’s prestigious areas — investors also buy into Buena Vista, Presidio Heights, Noe Valley, and Haight-Ashbury. Even so, San Francisco County has seen a high degree of volatility. Median home sales value
dropped by 20% from the first quarter of 2022 to $1.6 million in the first quarter of 2023. Still, demand for homes in the city has rebounded in the past few months. Despite some uncertainty, the San Francisco County housing market will remain strong through 2023 thanks to a stable local economy and the presence of posh neighborhoods.
The impact of COVID-19 on the Pacific Heights housing market
One of the defining features of the Pacific Heights housing market is its resilience amidst uncertainties. Like many other upscale neighborhoods in the Bay Area, the local real estate market in Pacific Heights became more active during the COVID-19 pandemic, when buyers increasingly favored spacious and secluded homes. The median home sale price in Pacific Heights exceeded $5 million at the height of the pandemic, the second-highest figure after Presidio Heights.
Pacific Heights foreclosure statistics
dropped marginally between March and April 2023 but increased by 8% from 2022. The expiration of COVID-related government programs (such as loan forbearance and foreclosure moratoriums) and rising interest rate are to blame for the rise. The states that bear the brunt of the foreclosure crisis include the District of Columbia, South Dakota, Vermont, and Montana, with California sitting 12th on the list of states with the lowest foreclosure rates. The presence of many affluent neighborhoods, such as Pacific Heights, that record low foreclosure rates keeps the state out of the foreclosure crisis.
Pacific Heights median home prices 2023
As a testament to the enduring appeal of the Pacific Heights housing market, home values have remained relatively stable over the years. Residential properties publicly available in Pacific Heights had a median list price of about $7 million
as of June 2023.
Pacific Heights housing market: should you invest?
Given the anticipated population growth and favorable indicators such as rising home values and low foreclosure rates (coupled with a strong economy and high-end retail stores), the top-ranked neighborhood in San Francisco is expected to remain lucrative well into 2023. Homebuyers and investors should take note of the strong housing market and act fast.
Invest in the Pacific Heights housing market to reap the benefits
is your go-to agent when buying real estate in Pacific Heights. An integral part of the Nob Hill Compass team, Victoria is a top-producing Pacific Heights realtor with over 15 years of experience handling residential transactions on the Westside. Contact Victoria Stewart
to find homes for sale in Pacific Heights.
*Header photo courtesy of Unsplash