San Francisco Housing Market: Buyers Have More Leverage, but the Right Townhouses Still Move

San Francisco’s townhouse market looks expensive, but sellers still have to earn their price. In February 2026, asking prices moved higher while the median home price buyers actually paid came in below last year, and price per square foot also fell sharply. This is not a market where every townhouse sells fast; it is a market where the right one does. Demand improved from January, but the bigger story is still buyer pushback against overpriced listings.

Buy with urgency only when the listing is clearly well-priced and move-in ready. Early-year demand has picked up, and the best townhouses can still attract quick attention.

At the same time, this is a more negotiable San Francisco market than it was a year ago. Inventory is higher, months of supply rose to about 5.0, homes are taking longer to sell, and price cuts are much more common. That gives buyers more room to compare options and push back on listings that are priced for seller optimism rather than market reality.

The key advantage right now is the gap between asking prices and outcomes. Median listing price rose to about $2.83 million in February, but the median home price was about $2.55 million, and price per square foot was down to about $1,668. That means you do not need to treat every list price as validated by the market.

Price for today’s San Francisco townhouse market, not last year’s. Sellers are still launching at higher asking prices, but February’s closings show buyers are not broadly accepting those numbers.

Your first price matters more than your backup plan. With 44% of listings taking a price cut in February, overpricing is getting exposed quickly, and sellers who miss the market at launch risk losing momentum.

Well-prepared homes can still do well, especially as seasonal activity builds. But this is selective leverage, not blanket pricing power. Clean presentation, realistic asking prices, and a strong first two weeks matter more than testing the ceiling.

Buyers are still active, but they are not paying last year’s prices across the board.

That is a stronger sign of buyer resistance beneath the headline price and supports the case for negotiation on the wrong listings.

Sellers are still reaching at launch, but that confidence is outpacing what buyers are actually validating.

Overpricing is getting punished more often, which is why sellers still need pricing discipline.

Buyers have more choice than they did a year ago, which helps explain the softer pricing power.

Buyer activity is picking up seasonally, but not enough to erase the market’s selective tone.

That looks more like stabilization than a renewed pricing surge.

Buyers are showing up for the right homes, but the broader market still is not rewarding every asking price.

Sellers are still testing the market even as buyers stay selective.

That is the clearest short-term sign that aggressive pricing is still running into resistance.

San Francisco is still a buyer-friendlier townhouse market than it was a year ago, even with some early-2026 momentum. Home prices look softer at the closing table than asking prices suggest, which means pricing remains a process of testing, pushback, and adjustment.

The one signal to watch in the next monthly update is the price-drop rate. If it stays this high, it will confirm that sellers still do not have broad pricing power and buyers should keep negotiating on stale or ambitious listings. If it falls meaningfully while the median home price and price per square foot improve, that would be the clearest sign that buyers are starting to accept firmer pricing again.