San Francisco housing 'normal' by income ratio masks deeper market and safety challenges

San Francisco is the only major U.S. metro where housing prices have returned to what analysts describe as a 'normal' level when measured by the mortgage payment-to-income ratio, according to a Redfin analysis published earlier this month. The metric tracks how much of a resident’s income goes toward mortgage costs and has rebounded to its July 2018 level after years of rising costs and elevated mortgage rates.

Yet that normalization does not translate into broad affordability for most residents. The median home price in San Francisco has risen about 8 percent since July 2018, far slower than the national rise of roughly 56 percent, while local household incomes have climbed substantially more, about 7.7 percent annually. Since 2018, San Francisco incomes have surged roughly 26 percent, outpacing the growth in home prices and pushing some buyers toward relative value in a market long accustomed to high costs.

In 2024 the city recorded 8,323 homeless individuals in its Point-in-Time count, and mid-2024 officials began more aggressive sweeps of encampments to address the crisis. While enforcement activity increased, advocates say arrests were common but charges for illegal camping were rare and most people remain on the streets. One unhoused resident told CBS News, "I'm going to get kicked out of the shelter, I'm going to come back on the street. I'm going to get cited again, it's a broken system."

San Francisco’s crime burden remains high. The city sees about 51,034 crimes annually, including violent and property offenses, and the crime rate stands at 63.08 per 1,000 residents—one of the highest rates in California and the United States. The risk of becoming a victim of property crime is roughly 1 in 18, underscoring why many buyers weigh the costs of $1 million-plus homes against safety concerns.

Industry dynamics have helped buoy demand. San Francisco is home to major tech and AI firms, including OpenAI, which have drawn workers back to offices as the AI boom accelerates hiring and compensation. Real estate agents say return-to-office mandates are fueling a renewed market, with AI workers often earning substantial salaries and signing bonuses that stretch the ability of buyers to finance high prices. "AI companies are setting up shop here — not just in Silicon Valley — and they're offering unusually high salaries and big signing bonuses to attract talent. I'm seeing more young tech workers and couples moving in with the means to buy. With incomes rising and home prices holding steady, those buyers view the market as an opportunity for relative value," said Ali Mafi, a Redfin Premier agent in San Francisco.

As the market evolved, July 2025 data showed the median home price in San Francisco at about $1.64 million, up from roughly $1.1 million in mid-2024, according to Realtor.com. The shift reflects sustained demand from AI-related industries and an office-based workforce that has helped keep price levels elevated even as the city grapples with homelessness and crime.

The broader social and safety environment remains a constraint for many would-be buyers. Housing costs, while not escalating as sharply as in the late 2010s, continue to outpace wage growth for many residents outside high-earning tech roles. City leaders and housing advocates say the challenge extends beyond price tags to include shelter access, supportive services, and policing strategies that balance public safety with humane treatment of people experiencing homelessness.

Experts caution that the apparent affordability implied by a normalized mortgage payment-to-income ratio does not capture the day-to-day realities of many San Franciscans. The city’s expensive living costs, persistent homelessness, and elevated crime rates create a complex backdrop for an economy popular with tech firms and AI companies—and for a housing market where the supply-demand imbalance remains pronounced in some neighborhoods even as prices level off relative to income.