POTM Blog Issue #06, June 25, 2026
The Missing Middle
Most people assume the cheapest homes draw the fiercest competition. For San Francisco houses, the opposite is true. Over the last year, single-family homes between $1.5M and $3M sold around 86 to 88% over asking at 122 to 125% of list, while both ends of the market stayed calm. The bidding wars live in the middle.
By Paulo Serna, San Francisco Real Estate Agent, Compass | Level Up Group · CA DRE# 02150409 · Published June 25, 2026
Ask most people where the competition is fiercest in San Francisco and they will point to the bottom of the market. The starter homes, the places a first-time buyer can almost reach. It feels right: scarcity at the entry level, a crowd of hopeful buyers, prices bid into the sky. The data says the opposite. For single-family homes, the fiercest competition is not at the bottom. It is in the middle.
The shape of the competition
Read the bars as a hill. Competition rises from the entry level, peaks hard between $1.5M and $3M, then falls away again at the top. The $2M to $3M band is the summit, with about 88% of homes selling over asking, and the typical home in the $1.5M to $2M band sold for about 125% of its list price. Now look at the two ends. Under $1M, just 55% of homes sold over asking and the typical sale landed almost exactly at list. Above $5M it is even calmer, fewer than half over asking and the median sale right at list. The cheapest and most expensive houses in San Francisco are, on this measure, the least competitive.
It helps to know where the typical house sits in this picture. The median single-family home sold for about $1.86M over the past year. That places the middle of the market squarely on the hottest part of the hill. This is not a niche slice. It is the center of gravity for the whole city.
By the numbers
| Price band | Sold over asking | Sale-to-list | Financed | Sales |
|---|---|---|---|---|
| Under $1M | 54.9% | 101.1% | 75.5% | 204 |
| $1M to $1.5M | 81.4% | 114.3% | 80.4% | 499 |
| $1.5M to $2M | 86.0% | 125.2% | 74.1% | 535 |
| $2M to $3M | 88.3% | 121.9% | 73.3% | 522 |
| $3M to $5M | 77.3% | 114.3% | 53.2% | 357 |
| $5M and up | 49.4% | 100.0% | 39.1% | 162 |
| All single-family | 78.8% | 115.4% | 70.1% | 2,279 |
Why the middle runs hottest
The table is fact. What follows is interpretation, and I want to label it that way. The $1.5M to $3M band is where the largest pool of qualified, motivated buyers meets a real supply of homes. More than a thousand single-family sales happened in that band over the year, more than any other part of the market. Enough buyers who can actually close, enough homes worth competing for, and you get bidding wars.
The bottom does not work that way. Under $1M the supply of true single-family homes is thin, and those buyers are more often constrained by financing and budget headroom. Three quarters used a loan, and a loan has a ceiling that cash does not. The top behaves differently again. Above $5M the buyer pool is small and particular, the homes are unique enough that comparisons get fuzzy, and fewer than 40% of those sales were financed. When buyers are scarce and every property is one of a kind, price gets discovered through negotiation, not a feeding frenzy. That is why the high end sits right at list while the middle runs 20-plus points above it.
One honest nuance before anyone overreads this. Homes in the hot band did not sell dramatically faster than the rest. The median house spent about 12 days on the market across most bands, and a few pricier bands actually moved a touch quicker. This is a story about price pressure, not speed. Middle-market homes are selling for more relative to where they were listed, because more qualified buyers are pushing against each other on price.
The hot middle versus the calm ends
The hot middle, $1.5M to $3M
~87%
of houses sold over asking
plan to compete on price, list is a floor
The calm ends, under $1M and $5M+
~50%
of houses sold over asking
more room to negotiate, sales near list
What it means if you are buying
If you are shopping the $1.5M to $3M range, treat the list price as a floor, not a target. The question here is rarely whether a desirable home goes over asking. It is by how much, and the typical outcome is a sale 20 to 25% above list. Going in expecting to pay list is going in expecting to lose. The flip side is useful: if your search has any flexibility at the edges, the entry level and the upper end are where more room to negotiate lives. A home listed at $950,000 or at $5.5M is far more likely to trade near asking than one listed at $2.4M.
What it means if you are selling
If your home falls in the hot band, the pressure is real and it can work for you. But the lesson of a 125% sale-to-list ratio is not to reach for the highest possible list price. It is closer to the opposite. Much of that premium comes from homes priced to invite competition, where a sensible list draws a crowd and the crowd does the rest. An aggressive anchor can thin the room, slow the home, and cost you the auction. Above $3M, and especially above $5M, the same playbook does not carry. That part of the market rewards patience and precise positioning, not a weekend stampede.
The honest caveats
A few things to keep this grounded. This is a trailing twelve-month window, so it blends a strong spring with a quieter winter. These are medians, not averages. Sale-to-list reflects pricing strategy as much as raw demand, since a home listed low on purpose posts a high ratio without any extra magic. And these are citywide single-family bands, so any one neighborhood can run hotter or cooler than the curve. With those caveats noted, the samples are large and reliability is Strong across every band.
Next issue, the same data from a different angle: houses and condos are running at very different speeds right now, and the gap is about as wide as it has been in years.
AI Corridor Scoreboard
One reading per issue on the city's softest segment, the condos near the new AI offices, so you can watch the turn as it happens.
| Issue | Date | Reading | Call |
|---|---|---|---|
| #01 | Jun 7, 2026 | Soft. Only 37 to 43% of SoMa, Mission Bay, and downtown condos sold over asking. | Clearest buyer opportunity in the city. |
| #02 | Jun 10, 2026 | Turning at the edges. Citywide condos hit 101.4% of list in May; inventory fell to 584 from 905. The corridor towers remain the soft end. | Window narrowing, not closed. |
| #03 | Jun 13, 2026 | Still the bottom of the overbid table. Corridor sale-to-list at about 98 to 99% versus 103.6% citywide, trailing year. | Opportunity intact for negotiators. |
| #04 | Jun 17, 2026 | Still the soft floor while houses raced ahead. Corridor near 98 to 99% of list versus 103.8% citywide and about 123% for single-family in the last 30 days. | Buyer opportunity holds; the gap to houses only widened. |
| #05 | Jun 21, 2026 | Cash, not heat. Corridor condos carry heavier cash than the citywide condo average, about 42% versus 37%, yet still sell near 98.7% of list with only about 20% over asking versus 45% citywide. Cash concentrates here; competition does not. | Negotiating room for financed buyers. |
| #06 (this issue) | Jun 25, 2026 | Still the calm corner while the house middle runs hot. District 9 condos, SoMa, Mission Bay, and South Beach, sold right at list, about 100%, with only 35% over asking on 300 sales, against the $1.5M to $3M house band at 122 to 125% of list. | Buyer opportunity holds where the bidding wars are not. |
- The most competitive single-family price in SF is the middle, not the bottom. The $1.5M to $3M band ran 86 to 88% over asking at 122 to 125% of list.
- The calm zones are the two ends. Under $1M and $5M-plus both sat near 50% over asking and right at list.
- The median SF house, about $1.86M, sits squarely in the hottest band. This is the center of the market, not a niche.
- This is price pressure, not speed. Median time to sell was about 12 days across most bands.
- If your search has flexibility at the edges, the entry and luxury ends are where the negotiating room lives.
Every band, window, and closing behind these numbers is live in the market explorer. Switch it to single-family and read your own price band.
Methodology and sources
Source: POTM Command governed MLS analytics, single-family closed sales over the trailing twelve months through June 24, 2026, readiness READY_FOR_REPORTS. Over-asking share, sale-to-list, and financed share are medians or rates within each price band; reliability is Strong across all six bands. Sale-to-list reflects pricing strategy as well as demand, since a home listed low on purpose posts a high ratio. Bands are citywide, so a single neighborhood can run hotter or cooler. Data deemed reliable but not guaranteed, subject to change, correction, and revision. General information, not legal, tax, or financial advice.
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